Bitcoin Dips Before US Inflation Data, But Market Remains Cautiously Optimistic
Bitcoin dipped below $67,000 as the June 11th Wall Street session opened, mirroring a common pre-inflation report market pullback.
Data from Cointelegraph Markets Pro and TradingView showed Bitcoin reaching a new June low of $66,696 on Bitstamp. This marks its worst price point so far this month. After nearly 24 hours of consecutive declines, Bitcoin couldn’t buck the trend as risk assets braced for a flood of US macroeconomic data and commentary from the Federal Reserve.
The price of BTC/USD currently sits 3.6% lower for the day, with traders speculating on various downside targets, some as low as $60,000.
Popular trader Roman, on a social media platform, expressed his intention to “enter longs if a reversal presents itself” near potential support levels. Another trader, Castillo Trading, echoed this sentiment, but with a slightly lower buy zone around $64,000.
“We knew some downside was possible for Bitcoin,” Castillo stated. “It was difficult to open new long positions above $70,000. Now, we’re entering an area where I’m more willing to consider adding to my holdings.”
Staying Calm in Volatile Markets
Several analysts urged calm amidst the overall sideways price action. Bitcoin has been consolidating below its all-time highs for nearly three months.
“Week 15 of chopping below the current all-time highs,” observed popular trader Jelle. “We’re starting this week in the red, pushing back towards the key support level at $67,500. It might be uncomfortable, but nothing has fundamentally changed. Don’t panic and sell.”
Trader, analyst, and podcast host Scott Melker downplayed the recent price action, calling it “much ado about nothing.”
“There’s been a decent drop today,” Melker explained, “but it’s simply testing support at the range EQ. We’re still trading in the top half of the range. This is part of the predictable price fluctuations that occur during this cycle.”
Open Interest and Potential Risks
However, market observers monitoring open interest (OI) on derivatives markets offered a note of caution. Open interest reached new highs in June, surpassing $37.6 billion. Historically, high open interest has often preceded significant Bitcoin price volatility.
While data from CoinGlass shows Bitcoin futures OI decreasing as the price retreats, it still remains above $35 billion.
Filbfilb, co-founder of the trading suite DecenTrader, believes this is a “high-risk situation.” They summarized their observation: “Price flat, OI up $1.5bn.” Filbfilb even presented a “worst case scenario” for BTC/USD, predicting potential price drops as low as $45,000.
The coming days will be crucial for Bitcoin as the US releases its Consumer Price Index (CPI) data on June 12th. This key inflation indicator heavily influences investor sentiment and could significantly impact Bitcoin’s price trajectory.
Despite the recent dip, the market remains cautiously optimistic. Whether the price continues to decline or rebounds will depend on investor reactions to the upcoming economic data and the overall health of the risk asset market.
