• Bitcoin price struggles after sliding below $70,000 support/resistance, but narrowing Bollinger Bands imply an imminent breakout
• The U.S. Consumer Price Index (CPI) report and Federal Open Market Committee (FOMC) meeting this week could trigger intense volatility
• Bitcoin’s future open interest hit a new record high, cementing positive market sentiment
Bitcoin has seen its fair share of volatility recently, with the price dropping below the key $70,000 support level over the weekend. However, there are signs that the cryptocurrency is gearing up for a breakout in the coming days.
Bitcoin Price Action
Bitcoin is currently trading just below $65,000, having bounced back slightly after dipping below $63,000 over the weekend. The price remains below the 20-day and 50-day moving averages, indicating the short-term trend is bearish.
However, the Bollinger Bands are narrowing on the 4-hour chart, suggesting Bitcoin is coiling up for a significant move. As the bands squeeze further, the likelihood of a breakout increases. The direction of the breakout will likely depend on how the market reacts to upcoming events.
Macroeconomic Events
Two key events this week could cause heightened volatility in Bitcoin’s price:
- FOMC Meeting
The Federal Open Market Committee will meet on June 11th to discuss monetary policy. The meeting itself is unlikely to result in any change to interest rates, but the Fed’s commentary on inflation and the economy will impact market sentiment.
- Consumer Price Index
The May CPI report on June 12th will provide critical data on whether inflation pressures are easing. Economists expect inflation to remain elevated at 8.3%. Higher than expected CPI could spark concerns of more aggressive Fed tightening.
Both events could lead to turbulence in equity and crypto markets. Bitcoin will likely take cues from traditional markets, at least in the short term.
Technical Analysis
Despite the recent weakness, Bitcoin’s technical picture still leans bullish. Here are some key levels to watch:
- The RSI is holding above 45, avoiding oversold conditions so far. This suggests there is still momentum on the side of buyers.
- Breaking above $69,600 would confirm the uptrend, opening the path back above $70,000.
- Support at $68,000 must hold. If it breaks down, selling pressure could mount and bring $66,000 into focus.
- The record high for Bitcoin futures open interest indicates traders still have an appetite for upside exposure. This is a positive underlying factor.
Conclusion
While Bitcoin faces short-term headwinds, the long-term outlook remains bullish. The technical landscape suggests an upside breakout is brewing. If key support levels hold, Bitcoin could be on track to print new all-time highs in the coming weeks, especially if macro concerns ease post-FOMC and CPI data. Volatility is likely in the days ahead, but Bitcoin appears positioned for further gains.
