Can Bitcoin Bulls Shake Off a New US CPI Inflation Spike?

Bitcoin (BTC) saw classic volatility ahead of Tuesday’s Wall Street open as a key US inflation gauge hit its highest levels in three years.

Key points:

• US CPI inflation reaches its highest year-on-year levels since 2023.
• Energy prices fuel the rise, with the US-Iran war continuing to make its presence felt.
• Bitcoin traders retain support levels while a 200-day trend line comes in as resistance.

Bitcoin price on edge as CPI beats multiyear records

Data from TradingView showed BTC price action circling $81,000 as risk assets saw fresh headwinds.

BTC/USD one-hour chart. Source: Cointelegraph/TradingView

These came in the form of the April US Consumer Price Index (CPI), which at 3.8% year-on-year put inflation at its highest since 2023.

“The index for energy rose 3.8 percent in April, accounting for over forty percent of the monthly all items increase,” an official news release from the US Bureau of Labor Statistics (BLS) noted.

The 12-month increase in energy was almost 18%, continuing to show the impact of the US-Iran war and oil-supply squeeze on prices.

“Conversely, the indexes for new vehicles, communication, and medical care were among the major indexes that decreased in April,” the release added.

US CPI 12-month % change. Source: BLS

Reacting, trading resource The Kobeissi Letter observed that the odds of the Federal Reserve pivoting to interest-rate hikes were “surging.”

“We are now experiencing post-pandemic inflation levels amid surging oil prices,” it wrote in a post on X.

Fed target rate probabilities (screenshot). Source: CME Group

The latest data from CME Group’s FedWatch Tool showed expectations anchored around current rates staying in place throughout 2026 and next year.

Crypto and risk assets tend to see downside pressure when rate hikes return, thanks to the implied lower liquidity entering the market.

Questions over Bitcoin’s “momentum” at the 200-day trend line

Bitcoin traders, meanwhile, reiterated lines in the sand that bulls should protect in the short term.

Related: BTC price target becomes $85K next: Five things to know in Bitcoin this week

“The 21-MA is a crucial level to look at,” crypto trader and analyst Michaël van de Poppe told X followers on the day, referring to the 21-day simple moving average (SMA) at $78,800. 

“The $76K area is a crucial support zone that I fancy not to be breached, if that happens, we’ll be going substantially lower.”

BTC/USDT one-day chart. Source: Michaël van de Poppe/X

Trading resource Material Indicators flagged problematic resistance in the form of the 200-day SMA near $82,600.

“Bulls appear to be attempting to establish an R/S Flip at $80.7k to build foundational support for another run at breaking the 200-Day SMA,” it summarized. 

“Do bulls have the momentum to succeed?”

BTC/USD one-day chart. Source: Material Indicators/X