- BTC rises above 81k, testing a key resistance
- US CPI rose 3.8% YoY in April vs 3.3% in March. PPI data up next
- The market prices in a 35% chance of a rate hike this year
- Trump – Jinping summit comes into focus
- BTC technical analysis
continued to show notable resilience on Wednesday, holding above the key $80,000 level despite stronger-than-expected , which increased expectations that the could raise interest rates later this year.
The world’s largest cryptocurrency was trading around 0.5% higher at $81,200. Broader crypto markets were also firmer, with rising 1.5% and gaining 3%. Total crypto market capitalisation edged 0.45% higher to roughly $2.7 trillion.
Hotter Inflation Raises Fed Rate Hike Expectations
The resilience comes despite inflation accelerating to 3.8% year-on-year in April, above expectations of 3.7%, while also surprised to the upside at 2.8%.
Following the inflation report, markets increased bets that the Fed may need to tighten policy further, with traders now pricing around a 35% probability of another rate hike before year-end.
Historically, Bitcoin and other risk-sensitive assets tend to perform better in lower-rate environments where liquidity conditions are more supportive. Even so, digital assets absorbed the inflation surprise relatively well, while US equities also remained broadly stable, with major indices down only modestly.
Attention is now shifting towards US data, which is expected to show wholesale inflation accelerated to 4.9% year-on-year in April from 4% previously. A stronger producer inflation reading could reinforce concerns that consumer inflation pressures may remain elevated in the months ahead.
Markets will be watching closely to see whether crypto and broader risk assets can continue to absorb signs of persistent inflation.
Could the Trump-Jinping Summit Impact Bitcoin?
Investors are also focused on the upcoming summit between Donald Trump and Xi Jinping. The meeting comes as the US-Iran conflict enters its third month, with the Strait of Hormuz still effectively closed and diplomatic efforts struggling to secure a lasting resolution.
Markets are increasingly looking towards China, given its economic relationship with Tehran and its role as Iran’s largest oil customer. Any indication that Beijing could agree to pressure Iran towards reopening the Strait of Hormuz may help ease , lower Treasury yields, and improve the outlook for risk assets, including crypto.
In addition, any improvement in US-China relations, particularly surrounding tariffs, Taiwan, and AI could help lift sentiment.
BTC Technical Analysis
BTC/USDT has traded within an ascending channel since early February and is currently testing resistance at the 200 SMA and upper band of the rising channel.
Buyers supported by the RSI above 50 will need to rise above 82.5k, the 200 SMA, to gain traction towards 85K, the 38.2% Fibonacci retracement of the 126k high and 60k low. Above here, 94k, the 50% Fib level comes into focus ahead of $100k, the psychological level.
Failure to retake the 200 SMA could see the price fall back towards 75k, the 23.6% Fib level, and the midpoint of the rising channel. Below here, the 50 SMA comes into focus at 74k, ahead of 71k, the lower band of the rising channel. A break below 65k, the April low creates a lower low.
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