Bitcoin Price Dips Slightly Amid Easing Trade Tensions

Bitcoin’s price experienced a minor pullback on Wednesday, after a notable 4.28% surge over the previous two days. This comes as risk sentiment remains robust, fueled by positive developments in trade discussions between the United States and China, ahead of the U.S. Consumer Price Index (CPI) release.

Bitcoin Retreats From Record High as US-China Trade Uncertainty Eases

Earlier in the week, Bitcoin’s price jumped 4.2% on Monday, buoyed by news that the U.S. and China had resumed trade talks in London. Following these discussions, both nations agreed to ease export restrictions, including those on rare earth minerals, and have established a framework to maintain a tariff truce.

Adding to the positive sentiment, a U.S. appeals court ruled that President Trump’s “Liberation Day” tariffs could remain in effect temporarily. This decision overturned a previous ruling by the U.S. Court of International Trade, which had blocked the tariffs’ implementation.

These ongoing developments have fostered a risk-on environment in the market, leading to a slight correction in Bitcoin’s price on Wednesday. However, it remains only about 2.2% below its all-time high of $111,980.

Bitcoin Traders Await US CPI Data

Market focus remains on the release of the U.S. Consumer Price Index (CPI) report for May. A higher-than-expected increase in the annual CPI could reinforce expectations that the Federal Reserve will maintain its current monetary policy in July. This scenario could lead to a strengthening of the U.S. dollar and trigger risk aversion, potentially causing a decline in the prices of riskier assets like Bitcoin.

Conversely, a weaker-than-expected CPI reading could revive expectations of a more dovish stance from the Fed, boosting investor confidence in risk markets and potentially leading to rallies in Bitcoin.

Bitcoin’s Current Setup Leans Bullish

A recent report from K33 Research highlights that the current risk aversion in the Bitcoin market could pave the way for further gains.

The report suggests that funding rates and leverage indicators point to sustained defensiveness. Negative funding rates often precede rallies rather than marking peaks.

“Overall, risk aversion in perpetual contracts points toward a healthy rally with constructive potency to materialize to the upside,” says an analyst at K33.

Institutional demand has also continued to strengthen this week. Spot Bitcoin ETFs in the U.S. recorded an inflow of $431.12 million on Tuesday, marking the second consecutive day of inflows. If this institutional interest persists or intensifies, Bitcoin’s price could rebound and potentially challenge its all-time high of $111,980.

Bitcoin Price Forecast: BTC Could Rally on Break Above Key Resistance

Bitcoin’s price recently found support around its 50-day exponential moving average (EMA) at $101,000 and subsequently rebounded strongly. BTC closed above its key resistance level of $106,406 and has been hovering around $110,000. As of Wednesday, it is trading slightly lower at around $109,500.

If Bitcoin continues its upward trajectory, it could extend the rally to retest its May 22 all-time high of $111,980.

The Relative Strength Index (RSI) on the daily chart is above its neutral level of 50, indicating strong bullish momentum. Additionally, the Moving Average Convergence Divergence (MACD) also showed a bullish crossover, providing a buy signal and suggesting an upward trend.

However, if Bitcoin faces a correction, it could extend the decline to retest its daily support level at $106,406.

Bitcoin, Altcoins, and Stablecoins: FAQs

• Bitcoin: The largest cryptocurrency by market capitalization, designed to serve as digital money. It operates without central control, eliminating the need for third-party involvement in financial transactions.
• Altcoins: Any cryptocurrency other than Bitcoin. Litecoin is considered one of the first altcoins, forked from the Bitcoin protocol.
• Stablecoins: Cryptocurrencies designed to maintain a stable price, typically pegged to a reserve asset like the U.S. dollar. They aim to provide a stable entry and exit point for investors in the cryptocurrency market.
• Bitcoin Dominance: The ratio between Bitcoin’s market capitalization and the total market capitalization of all cryptocurrencies. It reflects investor interest in Bitcoin. High Bitcoin dominance often precedes bullish movements, while a decline may indicate investors shifting capital to altcoins.

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