Bitcoin wavers near key moving average after US CPI surprise

US inflation data came in hotter than forecast, giving bitcoin sellers fresh momentum.

Before the CPI release, bitcoin was trading close to $74,300. In the immediate aftermath it dropped to around $73,500, putting it roughly 2% below Monday's close during early US trading.

Headline CPI increased 0.4% against a 0.3% estimate, while core CPI rose 0.3% versus an expected 0.2%. Markets had already priced in a 25-basis-point rate hike for December, but the stronger figures made a 50-basis-point move more likely. The US 2-year yield jumped about 19 basis points to 4.74%, the 10-year yield added 13 basis points to 4.991%, and the dollar strengthened. That combination intensified the selling pressure on bitcoin.

ETF outflows had already left bitcoin on the back foot

US spot bitcoin ETFs saw $201 million in net outflows on Monday, marking the third consecutive day of withdrawals. Sellers were already in control before the CPI data came out.

The 200-day moving average serves as the key gauge

Bitcoin came within a few hundred dollars of its 200-day moving average on both Sunday and Monday. The price bounced on Monday, but the rally was capped near $75,480, within the swing area between $74,925 and $76,052.

Today's move lower has seen bitcoin trade both above and below its 200-day moving average at $73,134. The price touched a low of $72,787 and, as of writing, sits at $73,092 — just below that average.

If buyers can push back above $73,134 and stay there, some immediate pressure would ease. From that point, the next upside target is $74,925, the lower boundary of the swing area where Monday's rally stalled.

What would give sellers the upper hand?

The next downside target is $72,554, the 50% midpoint of the rally from early July's low to September's high. If sellers can keep the price under the 200-day moving average and below that midpoint, they would strengthen their grip.

Below the midpoint, little obvious support exists until the 61.8% retracement at $69,057.

When the price repeatedly crosses a moving average, the next retest can reveal which side is gaining control. If a bounce fails below $73,134, sellers have a nearby level to lean against while targeting $72,554. If buyers reclaim the moving average and hold it on a pullback, the earlier dip below it begins to look like a failed break. Either way, the retest offers traders a clear level for defining risk.