Key takeaways
- BTC is trading near $77,000 after being rejected at the 200-day moving average.
- Bearish pressure reflects rising inflation and higher Treasury yields that are weighing on risk assets.
Bitcoin dipped below $77,000 on Wednesday after failing to clear the 200-day moving average near $82,000. The move comes as hotter-than-expected U.S. inflation data and tightening macroeconomic conditions have pressured risk sentiment.
U.S. Consumer Price Index (CPI) data showed year-over-year inflation accelerating to 3.8%, while higher oil prices and a sharp rise in the 10-year Treasury yield pushed markets to scale back expectations for Federal Reserve rate cuts. Traders are increasingly pricing in the possibility of another Fed rate hike later in the year.
Bears continue to dominate the market
K33 Research notes that Bitcoin’s rejection at the 200-day moving average echoes prior cycle behavior in 2014, 2018 and 2022, when quick recoveries were followed by aggressive deleveraging and sharp sell-offs.
Those earlier rebounds rebuilt trader confidence and leverage rapidly, leaving the market vulnerable to large corrections once momentum faded. “A core ingredient in the ensuing legs lower was the unwind of positions built up during the rally itself,” the report said.
K33 also points out important differences in the current cycle. Bitcoin took considerably longer to retest the 200-day moving average after dropping below it, spending 189 days before the May retest—longer than comparable stretches in past cycles.
Derivatives metrics indicate that traders remain cautious rather than overly bullish: funding rates have been negative for 81 consecutive days, and options skews are trading near yearly highs, signaling persistent defensive positioning.
Institutional flows have been mixed. Global Bitcoin exchange-traded products (ETPs) recorded the largest weekly outflow of the year last week, totaling 24,303 BTC. That was the ninth-largest five-day outflow since U.S. spot Bitcoin ETFs launched. K33 observed that selling intensified as Bitcoin approached the average ETF cost basis, a level that historically triggers elevated outflows.
Bitcoin technical outlook: BTC consolidates around $77,000
At the time of writing, Bitcoin is near $77,200, trading slightly above the 50-day EMA at $76,743 and the 100-day EMA at $76,867.
The broader trend is still capped by the 200-day EMA at $81,845, which remains a significant overhead resistance. This suggests short-term buyers are attempting to stabilize price action, but longer-term trend signals have not confirmed a sustainable bullish reversal.
Technical indicators point to fading bullish momentum. The Relative Strength Index (RSI) is drifting toward the mid-40s, implying weakening buying pressure without reaching oversold extremes. The Moving Average Convergence Divergence (MACD) remains in negative territory, reinforcing the view that recent advances have lost strength after the prior rally attempt.
If the rally resumes, immediate resistance sits near the 50% Fibonacci retracement of the recent move, around $78,962. A decisive breakout above that zone would be required to target higher levels.
On the downside, the first line of defense is the 50-day EMA at $76,743. A sustained break below that level could open the way to the 38.2% Fibonacci retracement at $74,487.
Deeper support is found near the reclaimed trendline around $70,785, with the 23.6% retracement at $68,950 serving as a key structural cushion for the current market setup.