Bitcoin rises despite US inflation hitting 3-year high: Where will BTC price go?

Bitcoin (BTC) erased its intraday losses and roseate by astir 2.5% to $62,410 instantly aft the US ostentation report, adjacent arsenic the header Consumer Price Index (CPI) deed its highest level successful much than 3 years.

BTC/USD hourly chart. Source: TradingView

Key takeaways:

• Bitcoin roseate arsenic the latest US CPI speechmaking matched economists' expectations.
• BTC inactive faces short-term downside risks arsenic it trades beneath beardown absorption levels.

May US ostentation matched expectations

The US CPI roseate 4.2% twelvemonth implicit twelvemonth successful May. On a monthly basis, header ostentation accrued 0.5%, portion halfway inflation, which excludes nutrient and energy, roseate 2.9% annually and 0.2% period implicit month.

US header and halfway CPI. Source: Bureau of Labor Statistics/Yahoo Finance

The header leap came mostly from higher vigor and gasoline prices, arsenic renewed Middle East tensions lifted lipid prices and reignited ostentation concerns.

At archetypal glance, the study looked bearish for Bitcoin. Higher ostentation usually reduces the likelihood of Federal Reserve complaint cuts, keeps Treasury yields elevated, and tightens fiscal conditions. That typically pressures hazard assets, including crypto.

But BTC rallied due to the fact that the ostentation people did not travel successful worse than feared.

Economists had already expected header CPI to deed 4.2%. The existent fig matched that forecast, removing the hazard of a hotter surprise.

Traders did not spot the study arsenic beardown capable to unit the Fed into a tougher stance, giving them country to bargain hazard assets again.

That gave Bitcoin the accidental to bounce from semipermanent enactment zones, including the 200-week exponential moving mean (200-week EMA, the bluish line) and the intelligence $60,000–$62,000 terms level area, arsenic shown below.

BTC/USD play chart. Source: TradingView

Is Bitcoin undergoing a bullish reversal?

Bitcoin’s post-CPI rebound does not yet corroborate a afloat bullish reversal.

From a method perspective, BTC inactive trades beneath cardinal short-term absorption levels, including the 20-period SMA, shown successful green, and the 50-period SMA, shown successful red, connected the four-hour chart.

BTC/USD four-hour chart. Source: TradingView

BTC besides appears to beryllium consolidating wrong a carnivore emblem pattern.

This setup forms erstwhile the terms rebounds wrong an upward-sloping parallel transmission aft a crisp decline. In elemental terms, the bounce whitethorn lone beryllium a intermission earlier the adjacent limb lower, not the commencement of a caller uptrend.

As a regularisation of method analysis, a carnivore emblem confirms erstwhile terms breaks beneath the flag’s little inclination line. The measured downside people equals the tallness of the erstwhile sell-off, projected from the breakdown point.

That puts Bitcoin’s bearish people adjacent $57,800 successful June, down astir 7.6% from existent levels.

Bitcoin alleviation bounce script besides successful play

Conversely, a wide breakout supra the absorption confluence, comprising the 20-period SMA, the 50-period SMA, and the flag’s precocious inclination line, would weaken the carnivore emblem operation and invalidate the contiguous downside setup.

BTC/USD four-hour chart. Source: TradingView

In that scenario, Bitcoin could widen its betterment toward the $64,000–$68,000 scope successful June, aligning with the 0.236 and 0.318 Fibonacci retracement lines.