Bitcoin (BTC) extended its downward move on Tuesday, dipping below the $103,000 mark as traders locked in profits following a strong rally earlier in the week. The pullback comes ahead of the release of key U.S. inflation data—April’s Consumer Price Index (CPI)—which has the potential to influence market sentiment and trigger volatility across risk assets, including cryptocurrencies.
Despite short-term weakness, analysts remain optimistic about Bitcoin’s broader trajectory. A recent report from Bitfinex suggests that favorable macroeconomic conditions could help absorb temporary dips, preserving the asset’s bullish momentum and positioning it for potential new highs in the coming months.
Profit-Taking Pressure Builds Ahead of CPI Release
Bitcoin kicked off the week with gains during Monday’s Asian trading session, fueled by positive market sentiment after news emerged of a temporary U.S.-China tariff reduction agreement. However, those gains quickly faded during the New York session as BTC dropped sharply, falling below $103,000 and reaching an intraday low near $100,700. At the time of writing, Bitcoin was trading around $102,600 during early European hours.
The retreat follows a robust weekly gain of over 10%, prompting many holders to realize profits. On-chain data from Santiment reveals a spike in the Network Realized Profit/Loss (NPL) metric—a clear signal that investors are selling BTC at a profit. This metric calculates the average return on investment across all on-chain transactions. A sharp rise indicates widespread profit-taking, which increases selling pressure and can contribute to short-term price corrections.
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With the U.S. CPI data for April set to be released, traders are exercising caution. Market forecasts predict headline inflation will remain steady at 2.4% year-over-year, while core CPI—excluding food and energy—is expected to hold at 2.8%. A higher-than-expected print could reinforce expectations that the Federal Reserve will maintain current interest rates in June, strengthening the U.S. dollar and triggering risk-off behavior. This scenario may lead to further downside pressure on Bitcoin.
Conversely, a softer inflation reading could revive speculation of future rate cuts, weakening the dollar and boosting investor appetite for high-risk assets like BTC. Historically, dovish Fed signals have correlated with strong rallies in cryptocurrency markets.
Bitfinex: Short-Term Dips Could Be Absorbed Quickly
Despite current price consolidation, Bitfinex’s latest “Alpha” report maintains a constructive outlook for Bitcoin. The analysis suggests that as long as macroeconomic conditions remain supportive, short-term pullbacks are likely to be absorbed swiftly, reinforcing the upward trend.
Key indicators point to sustained institutional and retail interest:
- Realized Cap Net Position Change reached a new all-time high of $889 billion, signaling growing investor conviction and capital inflow.
- Bitcoin spot ETFs have seen inflows exceeding $920 million over the past two weeks.
- Over 3 million BTC have moved out of loss territory, indicating a significant shift in market psychology.
These metrics suggest that despite short-term volatility, underlying demand remains strong.
Short-Term Outlook (1–2 Weeks)
Bitcoin is currently holding above the psychologically important $100,000 level, supported by steady spot trading volume and neutral funding rates—conditions that favor trend continuation. However, upcoming catalysts such as the CPI report and Federal Reserve Chair Jerome Powell’s speech on Thursday could introduce volatility.
Key levels to watch:
- Support: $98,500
- Resistance: $104,000–$106,000
A breakout above $106,000 could accelerate momentum toward $110,000 and eventually challenge the all-time high of $109,588 reached in January. That said, given the rapid ascent over recent weeks, a period of consolidation is expected. This may delay a new all-time high until June as supply and demand stabilize around the six-figure mark.
👉 Learn how ETF inflows influence Bitcoin’s price trajectory.
Medium-Term Outlook (1–3 Months)
The medium-term picture remains bullish. Favorable Federal Open Market Committee (FOMC) messaging, consistent ETF inflows, and Bitcoin’s relative strength compared to equities and altcoins support continued upside potential. Risks include unexpected macro shocks—such as a surprise CPI result—or a slowdown in ETF momentum.
Long-Term Outlook (6–12 Months+)
From a long-term perspective, Bitcoin’s fundamentals have never been stronger. Growing adoption by sovereign nations and institutional investors, expanding global ETF infrastructure, and increasingly favorable U.S. regulatory positioning are transforming BTC into a recognized macro reserve asset.
Cycle-based price targets between $150,000 and $180,000 remain achievable by 2025–2026, assuming no major liquidity crises occur. Structural supply constraints—driven by halving events—and programmable demand from decentralized finance (DeFi) and layer-two ecosystems further bolster scarcity narratives.
Technical Indicators Signal Bullish Exhaustion
Bitcoin faced rejection near $105,000 on Sunday, followed by a 2% decline over the next 24 hours. As of Tuesday, it trades around $102,300.
Momentum indicators suggest waning bullish strength. The Relative Strength Index (RSI) on the daily chart has dropped to 67 from overbought levels above 70 and is now trending downward. A move below the neutral 50 level would signal bearish dominance and could precede a sharper correction.
If selling pressure intensifies, Bitcoin may retest the **$100,000 support zone**. Conversely, a sustained close above $105,000 could reignite bullish momentum and open a path toward previous highs.
Frequently Asked Questions (FAQs)
Q: Why is Bitcoin dropping before the CPI release?
A: Traders often take profits ahead of major economic data releases like CPI to reduce exposure to potential volatility. Uncertainty around inflation figures can trigger risk-off behavior, leading to short-term sell-offs in assets like Bitcoin.
Q: What does CPI mean for cryptocurrency markets?
A: CPI data influences expectations about Federal Reserve monetary policy. Higher inflation may delay rate cuts, strengthening the dollar and pressuring crypto prices. Lower inflation can boost risk appetite and benefit Bitcoin.
Q: Is Bitcoin still in a bull market?
A: Yes. Despite short-term corrections, strong ETF inflows, on-chain accumulation, and macro tailwinds suggest the broader bull cycle remains intact.
Q: What happens if Bitcoin breaks below $100,000?
A: While $100K is a key psychological level, strong support exists near $98,500. A breakdown could trigger further selling, but sustained institutional demand may limit downside.
Q: How do ETF inflows affect Bitcoin’s price?
A: Consistent ETF inflows reflect growing institutional adoption and direct buying pressure, which supports price stability and long-term appreciation.
Q: Can Bitcoin reach $150,000 or higher?
A: Based on current adoption trends, ETF momentum, and supply constraints, price targets between $150,000 and $180,000 are plausible within the next 12–18 months under favorable macro conditions.
👉 Explore real-time market data to track Bitcoin’s next move.
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