Bitcoin Battles Downtrend Amidst Inflation Fears

Bitcoin (BTC) continues to face a persistent downtrend, with market analysts closely monitoring the cryptocurrency's performance. The recent market jitters, fueled by President Donald Trump's tariffs and disappointing inflation figures, have made it challenging for Bitcoin to maintain its buoyancy.

The US traditional markets opened on Thursday, and the reaction to the new inflation figures was closely watched. While the S&P initially fell back to 6,000, it managed to recover to 6,050 by the end of the day. Bitcoin, however, has wiped out its gains from Wednesday and is currently sitting at horizontal support just below $96,000.

The worsening inflation figures in both CPI and Core CPI are not favorable for risk assets like Bitcoin. This reduces the likelihood of the Federal Reserve implementing any rate cuts, despite President Trump's calls for them. The short-term time frame shows Bitcoin's price sitting on support but having made a series of lower highs and lower lows. A bounce from this level and a subsequent breakout of the descending wedge could improve market sentiment, but if the support does not hold, the bulls may face further challenges.

On the monthly time frame, the current price action does not appear to be a major concern. The horizontal support level is significant, and as long as the monthly candle can close above this level by the end of February, the outlook would be more positive. Additionally, a close above the ascending trendline would be more bullish than bearish. However, a close below the ascending trendline could be a cause for concern. The Stochastic RSI is currently showing a cross down of the indicator lines, which will need to reverse, with the 80.00 level becoming support.