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Bitcoin experiences a notable dip to $107K following the release of inflation data, triggering a classic “sell the news” reaction in the crypto market, while Ethereum demonstrates stronger technical momentum above critical support levels.
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The Consumer Price Index (CPI) report showing annual inflation at 2.4%, slightly below expectations, has led to profit-taking in major cryptocurrencies, reflecting cautious investor sentiment despite recent bullish trends.
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According to COINOTAG, “Bitcoin’s consolidation within its ascending channel suggests this pullback is a healthy retracement rather than a reversal, maintaining the overall bullish outlook for traders.”
Bitcoin dips to $107K after inflation data sparks profit-taking; Ethereum shows stronger momentum above key support, signaling potential for further gains in crypto markets.
Bitcoin’s Technical Retracement Amid Inflation Data: Key Support Holds
Bitcoin’s recent decline to $107,369 represents a typical market reaction following the release of cooler-than-expected inflation data. Despite the drop, the cryptocurrency remains comfortably above its 50-day Exponential Moving Average (EMA50), trading within a well-defined horizontal channel established since mid-May. This channel is critical as it consolidates gains made after a bullish correction earlier in the year, preserving the broader upward trend.
Technical indicators provide a nuanced view of Bitcoin’s current state. The Relative Strength Index (RSI) at 55 indicates a neutral momentum, suggesting neither overbought nor oversold conditions. This leaves room for potential upward movement before reaching overbought levels above 70. Meanwhile, the Average Directional Index (ADX) reading of 17 points to moderate trend strength, reinforcing the interpretation of a consolidation phase rather than a decisive trend reversal.
Importantly, the 50-day EMA remains above the 200-day EMA, confirming a sustained long-term bullish bias. Traders should closely monitor the key support zone near $103,000, located at the lower boundary of the ascending channel. Holding this support is essential to maintain the trajectory toward previous all-time highs, while a breach could signal increased vulnerability and deeper corrections.
Ethereum’s Stronger Momentum Signals Potential Upside
Ethereum’s price action contrasts with Bitcoin’s more cautious consolidation, displaying a more bullish technical structure. ETH has recently broken out of its horizontal consolidation channel between $2,400 and $2,700, supported by multiple successful defenses of this range. This resilience has bolstered trader confidence and suggests a more robust upward momentum.
Ethereum’s RSI at 62 indicates it is approaching but has not yet entered overbought territory, implying further room for price appreciation. The ADX reading of 25 confirms stronger trend momentum compared to Bitcoin, although volume compression hints at a potential buildup before the next significant price move.
Key support between $2,400 and $2,500 offers an attractive risk/reward entry point for investors, while a breakout above $2,850 could catalyze momentum toward psychological resistance levels at $3,000 and $3,300. These levels will be critical in determining Ethereum’s near-term trajectory.
Market Sentiment and Future Outlook: Navigating Key Levels
The Crypto Fear and Greed Index’s slight decline from 72 to 71 reflects a modest cooling in investor enthusiasm, signaling a more cautious approach following recent gains. This sentiment shift aligns with the “buy the rumor, sell the news” phenomenon observed after the CPI data release.
Looking ahead, the market’s direction will hinge on Bitcoin’s ability to maintain support around $104,000-$105,000 and Ethereum’s capacity to surpass resistance near $2,850. Renewed institutional buying could drive prices higher, while failure to hold these levels may prompt deeper corrections.
Traders and investors are advised to monitor these technical thresholds closely, as they will likely dictate the momentum and risk appetite in the crypto space over the coming weeks.
Conclusion
Bitcoin’s recent dip to $107K following inflation data represents a healthy retracement within an ongoing bullish framework, supported by key technical indicators and moving averages. Meanwhile, Ethereum exhibits stronger momentum, breaking out of consolidation and signaling potential for further gains. Maintaining critical support levels will be essential for both assets to sustain upward trajectories. Market participants should remain vigilant, leveraging these insights to navigate the evolving crypto landscape with informed strategies.
