FX.co ★ #Bitcoin chart analysis

Bitcoin (BTC) is facing renewed downward pressure, having fallen by more than 4% this week and hovering around $76,900. This decline is primarily attributed to weakening institutional demand, shifting macroeconomic expectations, and escalating geopolitical tensions. Market sentiment toward Bitcoin exchange-traded funds (ETFs) has also shifted significantly, with inflows stalling for several weeks and net outflows reaching nearly $500 million as of Thursday. This shift in institutional allocation patterns has resulted in a substantial withdrawal of passive capital, which was previously used primarily to absorb excess market supply. This makes the leading cryptocurrency more vulnerable to broader macroeconomic shocks and makes it more difficult to distribute dividends to investors over the long term. The latest US Consumer Price Index (CPI) report paints an increasingly unfavorable macroeconomic environment for risk-sensitive asset classes. While headline inflation held steady at 3.4% in August, it rose 0.4% month-on-month, and the core inflation rate slightly exceeded market expectations at 0.3%. Earlier this week, the Producer Price Index (PPI) data came in higher than expected, prompting financial markets to reassess the direction of US monetary policy. The CME FedWatch tool indicates a significantly increased likelihood of the Federal Reserve raising interest rates at its next meeting, reinforcing market expectations of borrowing costs converging to the 3.75% to 4.00% range. Higher interest rates and Treasury yields typically reduce speculative liquidity, increasing volatility in the digital asset market. Adding to these unfavorable domestic monetary policy factors, the sharp escalation of geopolitical tensions in the Middle East has also impacted global energy markets. Following renewed clashes in the Strait of Hormuz and the Bab el-Mandeb Strait, oil prices surged to multi-month highs, further increasing the risk premium associated with the macroeconomic outlook. Concerns about energy supplies, fueled by hints from political leaders about the potential for continued regional tensions, have exacerbated inflation fears and bolstered the appeal of the US dollar as a safe haven, limiting the potential rise in the value of digital assets. Technically, Bitcoin's weekly price encountered resistance near the 50-week simple moving average at around $79,668, reinforcing the possibility of a short-term pullback to the lows of $77,000. However, on the daily chart, the overall uptrend remains intact, with spot prices continuing to hold above the dense exponential moving average range between $70,800 and $72,900. Momentum indicators, such as the Relative Strength Index (RSI), have entered neutral to positive territory, reflecting a slowdown in the market rather than a clear trend reversal. Short-term downside support is strong near the 200-day and 50-day exponential moving averages around $72,800, while deeper horizontal support lies between $62,300 and $66,500, which should be sufficient to absorb any potential pullbacks. On the other hand, buyers need to re-establish their presence above the resistance levels around $81,700 to $85,000 to regain control of the market and achieve recovery targets.