Bitcoin (BTC) Briefly Spikes to $84,437 Before Reversing Due to Wall Street Selling Pressure

Bitcoin (BTC) briefly surged to $84,437 on March 12 following the lower-than-expected US Consumer Price Index (CPI) inflation report, before reversing gains as US market trading began.

Bitcoin (BTC) briefly hit a three-day high of $84,437 on Monday following the lower-than-expected US Consumer Price Index (CPI) inflation report, before reversing gains as US market trading began.

Softer-than-expected inflation could lessen pressure on the Federal Reserve to keep interest rates high, potentially boosting Bitcoin and other cryptocurrencies.

The US CPI print came in at 2.8% YoY, below the forecasted 2.9%, while Core CPI inflation dipped to 3.1% versus expectations of 3.2%. This marks the first decline in both Headline and Core CPI since July 2024, hinting at a cooling inflation trend that could influence Federal Reserve rate policy.

However, the world’s largest cryptocurrency is now facing resistance from 200-day Simple and Exponential Moving Averages (SMA/EMA) at $83,550 and $85,650, respectively. A strong close above these levels could open the door for a potential breakout toward $90,000.

Moreover, Bitcoin ETFs recorded a net outflow of $153.87 million, with Grayscale's GBTC selling 641 BTC worth $56.45 million.

"Bitcoin ETF outflows signal growing caution among institutional investors," stated QCP Capital, adding that BTC could see increased volatility depending on the Federal Reserve's next rate decision.

"We expect heightened volatility in crypto markets in the coming weeks, particularly in Bitcoin, as the market reacts to US CPI and anticipates the next move by the Fed on interest rates."

Bitcoin is battling to hold support at $82,000 amid mixed macroeconomic signals. A break below this level may invite sellers toward the next support at $80,000.

On the other hand, breaking above the 200-day SMA/EMA and sustaining gains above $85,000 could open the door for a potential rally towards $90,000.

The next major technical level to watch on the downside is $76,000, which corresponds to the lower boundary of the 2023-2024 bull market channel.

"Any dips into the top of the CME Gap would constitute a post-breakout retest attempt to fully confirm the exit from this CME Gap," analyst Rekt Capital noted on X.

"We're also seeing a return of the 200 SMA acting as support, which bodes well for bulls. A final decisive close above the 200 SMA and 200 EMA would be the final signal for a continuation of the bull market."

Bitcoin is currently trading at around $82,100, showing a slight recovery from earlier lows. A break above the 200-day SMA/EMA at $83,550/$85,650 could be the key to unlocking further gains and setting the stage for a potential rally towards $90,000.

However, failure to reclaim these moving averages may lead to further downside pressure, with the next support level at $80,000.

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