Key takeaways
- BTC climbed less than 1% and is trading above $87,000.
- The market is preparing for the CPI data release in a few hours.
Bitcoin trades above $87,000
The cryptocurrency market has been volatile since the start of the week, with most coins and tokens trading in the red. Bitcoin is exchanging hands around $87,000 after losing the psychological $90,000 level earlier this week.
The bearish move comes ahead of the U.S. Consumer Price Index (CPI) release today. U.S. inflation data for November, expected to show a 3.1% rise in the CPI, could influence the Federal Reserve’s interest rate decisions.
With October’s CPI absent due to the government shutdown, November’s reading will give investors a fresh view of price pressures.
Some analysts remain cautiously optimistic that Bitcoin could see a temporary relief rally soon. Nick Forster, founder of the on-chain options platform Derive.xyz, commented that
“BTC’s positioning remains firmly bearish. 30-day BTC volatility has climbed back to 45%, while skew sits around -5%. Long-term skew is also anchored near -5%, signaling that traders expect continued downside risk through Q1 and Q2 as ongoing selling pressure from previously dormant wallets weighs on the spot price.”
Analysts add that BTC’s probability of reaching $100,000 is close to 30%, while the chance of reclaiming its all-time high remains around 10%.
BTC may face the risk of deeper correction
The 4-hour BTC/USD chart shows a clear bearish tilt as Bitcoin has underperformed over recent days. The downward move began after price was rejected at a descending trendline on Friday and the coin has lost about 7% since then.
The leading cryptocurrency retested the $85,000 support level on Wednesday but has bounced back and is now trading above $87,000 per coin.
If the correction continues and Bitcoin closes a daily candle below the $85,569 support, the decline could extend toward the psychological $80,000 level.
The Relative Strength Index (RSI) on the daily chart sits at 41, below the neutral 50 level, indicating growing bearish momentum. The Moving Average Convergence Divergence (MACD) line is also positioned in bearish territory.
However, if BTC recovers and closes above $85,569, it could extend a rally toward resistance near $94,253.