The Bitcoin price moved sideways on Monday morning as the recent bullish momentum appeared to fade. The BTC/USD pair was trading around $118,230, well below its year-to-date high of $124,200. This pause in upward movement comes after several strong market catalysts drove Bitcoin to test fresh highs in recent weeks. Edward Frei, a trusted AureliusHub broker, shares valuable insights on the subject in his latest piece.
Macroeconomic Data and BTC/USD Reaction
The Bitcoin rally stalled following the release of strong US inflation data last week, which influenced Federal Reserve interest rate expectations. The headline Consumer Price Index (CPI) remained steady at 2.7%, while the core CPI jumped to 3.1%, marking the highest level in months.
Meanwhile, the Producer Price Index (PPI) rose to 3.6% in July, indicating an escalation in business costs across the United States.
These inflation figures prompted Wall Street analysts to scale back expectations for interest rate cuts, leading to a drop in rate cut odds for September from nearly 100% to 70%. The BTC/USD pair, being sensitive to macro trends and risk sentiment, reacted accordingly, as traders weighed the implications for liquidity and risk assets.
Investors will now closely monitor the upcoming Jackson Hole Symposium in Wyoming. Historically, this event provides key insights into Federal Reserve policy, potentially influencing the timing of rate cuts and, consequently, Bitcoin price action.
Spot ETF Flows and Institutional Demand
The BTC/USD market is also under the influence of institutional investor activity, particularly in spot ETFs. Recent data indicates that Bitcoin spot ETFs added a net $547 million last week, a notable figure but significantly lower than Ethereum’s inflows of $2.85 billion. This trend suggests growing interest in Ethereum relative to Bitcoin, which may temporarily dampen Bitcoin’s upward momentum.
Another factor impacting BTC/USD is the ongoing corporate treasury strategy, where major companies continue to add BTC tokens to their balance sheets, following the model of MicroStrategy (MSTR). Such strategies signal institutional confidence in Bitcoin as a digital reserve asset, providing a fundamental support level for BTC/USD despite short-term volatility.
BTC/USD Technical Analysis: Double-Top Pattern
From a technical perspective, the BTC/USD pair has pulled back from the year-to-date high of $124,420 to the current $118,300. Despite this retracement, the pair remains well above both the 50-day EMA and the 100-day EMA, which are key support levels in trending markets. Remaining above these averages suggests medium-term bullish strength, even as short-term corrections occur.
However, oscillators present a mixed picture. The MACD indicator remains above the zero line, signaling sustained positive momentum, while the RSI has retreated to around 50, indicating a neutral or indecisive market condition.
This sideways movement in oscillators often precedes pattern-driven price action, suggesting that the market may be consolidating before a potential breakout or breakdown, depending on how support and resistance levels are tested in the near term.
The most notable formation is the double-top pattern with peaks at $123,283 and a neckline at $112,000. A double-top is a classic bearish reversal pattern, suggesting that BTC/USD may face downward pressure in the short term. Traders should note that a break below the neckline at $112,000 could trigger accelerated selling, confirming the pullback scenario.
On the upside, resistance at $123,280 is critical. A sustained move above this level would invalidate the bearish outlook and signal the potential for a renewed bullish phase. As such, traders are advised to monitor key support and resistance levels, along with volume confirmation, for a more precise entry or exit strategy.
Conclusion: Navigating BTC/USD Volatility
In summary, the BTC/USD pair is showing signs of a short-term pullback following the double-top formation at $123,283. Inflation data, Federal Reserve interest rate expectations, and institutional investment flows are key factors influencing Bitcoin’s market dynamics.
Traders should be aware that the pullback target is likely the $112,000 neckline, while resistance at $123,280 serves as a critical level for bullish invalidation. Technical indicators, including EMA support, MACD momentum, and the RSI level, offer further guidance for position management.
The upcoming Jackson Hole Symposium, coupled with corporate BTC strategies and spot ETF flows, will likely dictate the short-term direction of the BTC/USD pair. With the double-top pattern suggesting caution, market participants should prepare for potential volatility while monitoring both fundamental and technical signals.
Overall, BTC/USD continues to exhibit structural bullish tendencies in the medium term, but short-term bearish setups like the double-top highlight the importance of risk management in volatile cryptocurrency markets.
