Bitcoin Price Rise To New All-Time High Could Be Hindered By Rising CPI

Bitcoin’s price has surged over the last few days, reigniting hopes of reaching a new all-time high (ATH). As of the latest price action, BTC is just inches away from breaching the $110,000 resistance. 

Despite the strong momentum, Bitcoin may struggle to form a new ATH if external factors such as the upcoming CPI report is weighed in.

Bitcoin Investors’ Greed Rises

Trader sentiment has been on the rise recently, signaling an increase in optimism. However, this shift toward bullishness could be a warning sign of an impending market top. As Bitcoin enters the Greed zone, it raises concerns that the asset could be overbought. Historically, this has been a signal that Bitcoin’s price is reaching its peak, and a reversal could follow soon after.

While the market sentiment may suggest a continuation of the bull run, Bitcoin has often extended its rise even while in the Greed zone. This mixed signal has left investors uncertain, as the typical pattern of a market top may not always apply. As Bitcoin inches closer to its $110,000 resistance, the heightened optimism could also set the stage for a price correction.

Bitcoin Sentiment. Source: Santiment

Bitcoin’s macro momentum is heavily influenced by the upcoming Consumer Price Index (CPI) report, scheduled for release on June 11. The CPI for May is forecasted to rise by 0.2%, which would increase the year-over-year (YoY) inflation rate from 2.3% in April to 2.5%. This increase could contribute to market uncertainty, especially if inflation remains higher than expected.

Additionally, recent selling behavior in the market has contributed to a more cautious investor outlook. The rising red bars on the chart indicate rising Bitcoin sales by investors.

This, combined with the CPI data, could lead to bearish sentiment, prompting a decline in Bitcoin’s price. Investors may adjust their positions, anticipating that the rising inflation could negatively impact Bitcoin’s growth, especially if market expectations are not met.

Bitcoin Exchange Net Position Change. Source: Glassnode

BTC Price Is Close To A New High

Bitcoin’s price is currently at $109,480, just below the critical $110,000 resistance. Although BTC briefly crossed this resistance in the past 24 hours, the broader market signals suggest a potential price drop. With rising trader sentiment and the looming CPI report, Bitcoin could struggle to maintain its current level.

If the CPI report fails to meet investor expectations, Bitcoin could drop to its next support level of $108,000. This decline would be in response to the bearish sentiment surrounding the potential inflation rise. A failure to break above the $110,000 resistance could signal a more prolonged downturn for Bitcoin’s price, sending it to $108,000 or $106,265, wiping a chunk of the recent gains.

Bitcoin Price Analysis. Source: TradingView

On the other hand, if the CPI report comes in below expectations, showing a YoY inflation rate of 2.1% instead of 2.3%, Bitcoin could experience a bounce back. In this case, securing $110,000 as support could lead Bitcoin toward its ATH of $111,980 and beyond. A positive CPI report would likely renew investor confidence, pushing Bitcoin to new highs and invalidating the bearish outlook.