Bitcoin appears vulnerable to a pullback as investors brace for the upcoming US inflation report, which is expected to reveal a rise in the Consumer Price Index (CPI). The Cleveland Federal Reserve’s latest nowcast projects the headline CPI will increase to 3.56% year over year in April, up from March’s 3.3%. This rise in inflation could pressure speculative assets like Bitcoin, potentially pushing its price lower toward the $70,000 level.
Although the monthly CPI is predicted to slow to 0.45% from 0.9%, core inflation remains steady at 2.56% year over year. This mixed inflation outlook suggests that, despite a deceleration in the monthly pace, annual inflation will firm. Such a scenario may reduce the Federal Reserve’s flexibility to cut interest rates soon, creating downward pressure on high-risk investments including cryptocurrencies.
Bitcoin has so far weathered recent inflation surprises better than expected. After March’s CPI report showed a surge from 2.4% to 3.3%, Bitcoin rallied more than 15%. This resilience was supported by institutional demand, which recently absorbed over 500% of new Bitcoin supply, largely driven by an entity known as Strategy. However, this buying momentum appears to have slowed. Strategy has halted Bitcoin purchases, and its preferred stock, STRC, trades below its $100 par value. This situation limits Strategy’s ability to raise additional capital for acquisitions.
With institutional buying losing steam, Bitcoin may be more exposed to potential downside following the impending inflation data. Analysts note that large investors could begin de-risking positions around the CPI release, echoing patterns seen in prior inflation cycles. Key technical support currently lies at approximately $78,600; if that level breaks, a decline toward $74,000–$75,000 is likely to unfold.
From a technical perspective, Bitcoin’s daily chart exhibits a classic rising wedge, a bearish pattern that signals a possible reversal if the price breaks below the wedge’s lower trendline. This formation typically leads to a price drop roughly matching the wedge’s height. Market watchers view this setup as a warning for a potential Bitcoin retreat toward $70,000 in the near term.