Source: Cointelegraph
Original: “Bitcoin (BTC) May Face Short-Term Technical Sell-Off: Risk of Dropping Below $100K Ahead of May 13 CPI Data Release”
Key Points:
Risk aversion behavior that may occur ahead of the May 13 CPI data release could be one of the reasons for today’s Bitcoin price pullback.
The market structure and fundamental quality factors for Bitcoin remain bullish, indicating that today’s pullback may be temporary.
Bitcoin's price briefly fell on May 12, dropping to $102,388 after reaching an intraday high of $105,819 during U.S. trading hours. At first glance, this sudden pullback seems unexpected given the positive news of the day.
Since Sunday evening (May 11), mainstream media headlines have reported positive progress in U.S.-China trade negotiations held in Switzerland. Throughout the night, U.S. President Trump posted a series of messages on the Truth Social platform celebrating the positive outcomes of the agreement.
BREAKING: U.S. Announces China Trade Deal in Geneva pic.twitter.com/JjgvYAvAGe
With the news of this tentative agreement, the U.S. stock futures market surged, translating into a 1,000-point rise in the Dow Jones at the opening. In addition to the temporary resolution of the U.S.-China trade war, Bitcoin has achieved consecutive victories over the past two weeks. On May 12, Strategy CEO Michael Saylor announced that the company had acquired 13,390 Bitcoins, bringing its total holdings to 568,840 BTC.
On the same day, healthcare company KindlyMD saw its stock price soar by up to 600% after announcing a merger with Nakamoto Holdings, a Bitcoin investment company founded by Trump’s current cryptocurrency advisor David Bailey. The trend in April was similar to today, with various U.S. and international companies frequently announcing the creation of Bitcoin reserve funds.
Despite the apparent acceleration of Bitcoin's mass adoption momentum, Glassnode data indicates that after a 9% increase over the past week, BTC prices may enter a brief consolidation phase.
The on-chain analytics firm released the above chart and warned: "BTC supply mapping shows that new demand remains strong. The RSI for first-time buyers has remained at 100 throughout the week. However, momentum buyers remain weak (with an RSI of about 11), and profit-takers are increasing. If new capital inflows slow down, the lack of follow-up buying support may lead to price consolidation."
On major cryptocurrency exchanges, selling activity in the perpetual futures market has increased, and as BTC prices rose to the selling pressure zone around $106,000, the spot market also experienced selling behavior.
From a trader's perspective, some of the selling may be risk control measures ahead of the May 13 Consumer Price Index (CPI) inflation report, while also reflecting the market's belief that the impact of Trump's trade agreement with China has been fully digested, as BTC failed to break and stabilize above $104,000 following such significant news.
Before the trade war-related news was released, the U.S. Dollar Index (DXY) rose, and stock indices surged. Bitcoin failed to break and hold the $104,000 to $105,000 range before the opening of stock futures, and subsequently did not follow the stock market's rise during the New York trading session, indicating that some traders chose to close profitable long positions before tomorrow's CPI data release or before current buying interest shifted to lower price levels.
The above chart supports this view, showing that the open interest volume has been rising hourly, while the funding rate suddenly spiked when short positions were opened and long positions were liquidated.
Spot buying played a key role in last week's Bitcoin price increase, and Strategy's announcement on May 12, along with the inflow of spot BTC ETF funds over the past seven days, has raised more urgent questions: Will the buying enthusiasm seen since the end of April continue into next week?
Considering the accelerating pace of Bitcoin adoption in traditional finance and the rapid improvement of the cryptocurrency regulatory environment, the current price trend seems to be merely a short-term technical adjustment. Perhaps, depending on tomorrow's CPI data, once the market digests the details of the report, spot and margin longs may make a strong return to the market.
Related: Dubai Government Partners with Crypto.com to Launch Crypto Payment Channel for Government Services
This article does not contain any investment advice or recommendations. Any investment and trading activities involve risks, and readers should conduct their own research before making decisions.
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