Bitcoin Falls Below $103K as Traders Take Profits Ahead of US CPI Data
TLDR
- Bitcoin (BTC) extended its decline on Tuesday, falling below $103,000 amid profit-taking by traders following last week’s double-digit rally
- The move comes ahead of the US Consumer Price Index (CPI) release, a key inflation gauge that could add volatility to risk assets
- Analysts say supportive macro conditions and capital inflows suggest any dip may be short-lived
Bitcoin (BTC) extended its decline on Tuesday, falling below $103,000 amid profit-taking by traders following last week’s double-digit rally. The move comes ahead of the US Consumer Price Index (CPI) release, a key inflation gauge that could add volatility to risk assets.
BTC touched an intraday low of $100,700 during the New York session on Monday before rebounding slightly to $102,300 by early Tuesday in Europe. Santiment’s Network Realized Profit/Loss metric showed a spike, indicating many holders sold at a profit, contributing to short-term pressure.
The US CPI for April is expected to rise 2.4% year-over-year, unchanged from March. A surprise increase could boost the US dollar and weaken risk sentiment, potentially pushing BTC lower. Conversely, softer inflation data could revive risk appetite and lift crypto markets. Bitfinex analysts say supportive macro conditions and capital inflows, like the $920 million into spot BTC ETFs in the last two weeks, suggest any dip may be short-lived.
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Key Takeaways
Despite recent price weakness, Bitcoin's broader outlook remains bullish, underpinned by strong inflows and on-chain data. Bitfinex’s latest Alpha report notes that the Realised Cap Net Position Change has hit a record $889 billion, reflecting sustained long-term conviction among BTC holders. Over 3 million BTC have returned to profitability, suggesting fewer coins are being held at a loss, reducing selling pressure. Spot Bitcoin ETF flows have been positive for two straight weeks, indicating strong institutional demand. Technically, Bitcoin faces near-term resistance at $105,000. If it fails to break through, the pullback could extend toward the key psychological level of $100,000. The Relative Strength Index (RSI) has dropped below 70, signaling cooling momentum, and a further decline below 50 could trigger steeper losses. Still, analysts believe macro-driven dips could be quickly absorbed, especially if inflation data supports a dovish Fed stance. A close above $105,000 could reopen the path to the all-time high of $109,588 reached in January.
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