- Bitcoin must reclaim and hold $108,300 to sustain bullish momentum after a CPI-fueled rally.
- Volatility rises as CPI beats and trade hopes lift sentiment, but technical risks remain.
- Analysts warn of a drop to $99K–$90K if BTC fails to defend key support near $108.3K.
Bitcoin is trading at $106,812.60 after falling from a recent high of $110,546. The price action follows renewed optimism around softer U.S. inflation data and macroeconomic developments. However, current market structure suggests Bitcoin must hold above the $108,300 level to maintain bullish momentum. A drop below could lead to further losses down to $107,000.
Volatility Rises After CPI Data and Trade Agreement Hopes
Bitcoin rallied briefly above $110,000 after the U.S. Consumer Price Index (CPI) showed a year-over-year increase of 2.4%, below the 2.5% estimate. Core CPI also came in lower at 2.8%. This pushed the U.S. Dollar Index down to 98.5 and strengthened risk assets like Bitcoin.
Cas Abbe stated via X that “BTC monthly RSI is now moving into the overbought zone,” suggesting the asset is entering the final phase of its bull run. Historical data shows that the strongest gains often occur during this phase, though higher volatility also becomes more common.
Positive macro news, including progress on a new U.S.-China trade agreement, further lifted sentiment. However, analysts warn that the rally may not continue unless Bitcoin holds above $108,300. Failure to hold this support could trigger a move toward the $99,000 to $90,000 range.
Technical Patterns Suggest Uncertain Near-Term Movement
Bitcoin’s short-term chart is forming a bullish pennant. But the price failed to hold above $110,000, slipping under the pattern’s support level. A correction toward $106,000 is being watched by traders for possible long liquidations.
Market makers might push BTC to around $106.8K to take out overleveraged longs. The current funding rate remains flat, and spot buying continues to support the price, but the market remains headline-sensitive.
Brian Quinlivan from Santiment noted that “bullish sentiment is high,” yet the market could face corrections before attempting new highs. A stable recovery above $108,300 remains the key to continuing the upward move.
