Bitcoin ($BTC) remained under pressure Wednesday after stronger-than-expected US inflation data prompted another wave of caution across the cryptocurrency market.
Bitcoin has dropped below $73,800, and sellers are increasingly focused on the psychological support level at $70,000.
The latest drop came after the release of hotter-than-expected US Consumer Price Index (CPI) data, fueling concerns that the Federal Reserve could keep monetary policy restrictive for longer.
Technical indicators suggest recovery attempts could face resistance unless broader market sentiment improves.
Hot US inflation data pressures Bitcoin and altcoins
The latest US CPI report has put further pressure on an already fragile cryptocurrency market, adding to concerns about the Federal Reserve's interest rate outlook.
Inflation above expectations generally makes monetary easing less likely and can strengthen expectations that the central bank will maintain or raise borrowing costs.
For Bitcoin, this kind of environment can be challenging, as higher interest rates tend to make traditional assets that pay yield more appealing than speculative investments.
Investors are reassessing the prospect of further monetary tightening, while traders remain cautious about increasing their exposure to risk-sensitive assets.
Cryptocurrencies could remain vulnerable to further losses in the coming sessions unless inflation concerns ease or buying demand strengthens.
Bitcoin technical outlook: $BTC bears target $70,000
Bitcoin remains under significant selling pressure, and its technical structure indicates that bears are still firmly in control.
At the time of writing Wednesday, $BTC was trading around $73,664, extending its recent decline after failing to regain key technical resistance levels.
The cryptocurrency remains below its major daily Exponential Moving Averages, supporting the bearish outlook.
The 200-day EMA is at $76,404, while the 100-day EMA is at $77,473. The 50-day EMA is higher, at $78,879, posing another significant hurdle for buyers seeking to reverse the downtrend.
With the moving averages clustered above Bitcoin's current price, recovery attempts could face considerable selling pressure.
Momentum indicators also point to persistent weakness. The daily Relative Strength Index (RSI) has fallen toward 34, nearing the oversold threshold of 30.
The Moving Average Convergence Divergence (MACD) remains in negative territory, further confirming the continued dominance of bearish momentum.
If Bitcoin continues to decline, its next major downside target is the psychological support level at $70,000. This area could draw buying interest from traders seeking to take advantage of lower prices.
Despite current bearish conditions, Bitcoin could make a temporary recovery if buyers react to increasingly oversold momentum readings.
The first major resistance is the 200-day EMA, near $76,404. A sustained move above this level would offer an early sign that buying momentum is improving.
Beyond this resistance, Bitcoin would need to regain the 100-day EMA, around $77,473. The next significant supply zone is the 50-day EMA, near $78,879.
A convincing breakout above these moving averages would improve Bitcoin's near-term outlook and could encourage further buying.
If bullish momentum builds further, the cryptocurrency could target the horizontal resistance zone around $85,000.
Until Bitcoin regains its major moving averages, short-term rallies remain vulnerable to renewed selling pressure.
AI disclosure: AI tools assisted with research and drafting of this piece. An Invezz editor reviewed the facts, sources and wording before publication. Any opinions or analysis are Invezz’s, not those of an automated system.
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