Bitcoin Braces for CPI Volatility, Eyes Support Levels

The Bitcoin (BTC) market is bracing for the upcoming release of US Consumer Price Index (CPI) data on Wednesday, with analysts expecting high volatility in the cryptocurrency's price. The CPI figures for January are forecast to show a slight decrease in the overall index, while the core CPI is expected to rise slightly. The market is anticipating a potential reaction from Bitcoin following the announcement.

The US Bureau of Labor Statistics will release the CPI figures later in the day on Wednesday. Market participants are hoping that the figures will not exceed the forecasted levels, as this could lead to a more dovish stance from the Federal Reserve (Fed) regarding interest rate cuts. If the CPI and core CPI figures come in as expected, the market may not be surprised, and the Fed is likely to maintain its current stance on rate cuts.

While the current economic environment may not be ideal for Bitcoin, market participants are expecting a potential bounce in the cryptocurrency's price. Technical analysis suggests that Bitcoin is currently traversing within a wedge pattern, with a potential support level at the ascending trendline. If the price reaches this level, a bounce could be likely. Additionally, the bottom of the sideways range that Bitcoin has been following for around three months is at $92,000, which could also serve as a support level.

Looking at the broader macro picture, the weekly chart of Bitcoin's price shows a clear uptrend. The Stochastic RSI indicator has bottomed only a handful of times in the past, and each time, the resulting bounce has led to a significant increase in the cryptocurrency's price. As the indicator lines approach the bottom once again, market participants are anticipating a potential upward price momentum for Bitcoin, which could lift the cryptocurrency's price even further.