BTC falls below $75,000: CPI data becomes the key to a long and short battle

According to Woofun AI, Bitcoin (BTC) showed a weak trend in early Tuesday trading, and the market's focus is on the upcoming October Consumer Price Index (CPI) data. This data will directly determine whether risk assets will rebound or experience a new round of sell-off at the end of the year. At press time, the market-leading cryptocurrency traded at around $74,750, down 0.6% from midnight Coordinated Universal Time; previously, during the overnight trading session, its price briefly crossed the $75,000 mark. The data, which is due to be released at 8:30 a.m. ET, is viewed as a weather vane for current market sentiment. Any fluctuation that deviates from expectations could trigger a sharp price revaluation.

According to the Dow Jones consensus forecast, the CPI increase is expected to be 0.3% this month, while the core inflation rate after excluding food and energy costs is expected to rise 0.2%. The increase in both figures was lower than the 0.6% and 0.3% increase in September, indicating that inflationary pressure may be easing.

However, the October data will not be compared to the same period last year, because the Bureau of Labor Statistics was unable to complete the compilation of a complete index due to the government shutdown that occurred in October last year, and annual data to reference is missing. As far as Bitcoin is concerned, the timing of this report's publication is quite sensitive. BTC has been on a slight downward trend since it peaked above $87,000 in early October due to artificial intelligence-related factors putting pressure on Wall Street. Many bulls originally expected to use spot Bitcoin ETFs to push prices to continue to rebound before the end of the year, but the poor performance of such products made the market have to rely on the broader economic environment and the buying power of the spot market to resume gains. As a result, analysts warned that weak inflation data would only provide a brief relief, and a shift in demand for spot ETFs is key to achieving a sustained rebound.

BRN analysts say that any easing of inflation expectations will help risk assets perform, but what Bitcoin requires is actual buying rather than a luck factor. Until ETF funding flows turn positive and the Federal Reserve takes a dovish stance, the downward price trend will remain difficult to change. Bitget Wallet analysts also expressed similar views. They pointed out in an email that this week's inflation data will bring another test. Higher inflation readings may reinforce expectations for another rate hike in December, while more moderate core inflation data could trigger a rebound. However, whether Bitcoin can achieve a lasting recovery depends on improved liquidity and demand from the spot market, not just the easing of the macro environment.

It should be pointed out that this inflation data is only the first of many data to be released in the next few days. Producer price data will be released on November 13, the minutes of the Federal Reserve's October meeting will be released on November 18, and PCE (personal consumption expenditure) data, which is the Federal Reserve's preferred measure of inflation, will be presented on November 25. Utkash Ahuja, founder and managing partner of Moon Pursuit Capital, said that continued inflation may limit the ability of the Federal Reserve to provide policy support, even when the performance of technology stocks is weak; he also quoted San Francisco Federal Reserve Bank Governor Mary Daly's latest statement on possible further interest rate hikes, believing that investors should not think that the Federal Reserve will soon bail out the market. For artificial intelligence projects that require large amounts of capital, higher financing costs and longer approval cycles may reduce project returns even if demand meets expectations. He also pointed out that companies that require new capital before existing projects generate cash flow not only face the risk of project execution, but also have uncertainty about future financing conditions.

According to data compiled by Woofun AI, BRN believes that if Bitcoin's daily (Coordinated Universal Time) price closes below $73,000, it may trigger a downward trend in the price direction of $70,000, and may even fall further below $60,000 in July. The agency sees the recent rebound from below $74,000 as a brief break in the downtrend rather than a true reversal. Bitget Wallet analysts also see the $73,000-$74,000 range as a key support level. They said that to achieve price stability, more balanced derivatives holdings and continued positive ETF capital inflows are needed; if they can re-establish and hold the $80,000 mark, it indicates strong market demand. Once the price clearly falls below $73,000, the $68,000 price level could be threatened.

If $68,000 doesn't hold up, the sell-off is likely more than just a temporary leveraging effect.

From a structural point of view, the current vulnerability of the Bitcoin market stems not only from a macro-data game, but the deeper reason is a substantial lack of capital. Although inflation data may provide a short-term window for sentiment repair, it is difficult for any rebound to be sustainable without continued net inflows from spot ETFs. Utkash Ahuja's views on the suppression of returns on artificial intelligence projects by high financing costs have further revealed the transmission mechanism of macro-liquidity tightening to high-risk assets.

This means that even if the CPI data is in line with or better than expectations, if the Federal Reserve maintains a hawkish stance, the market may still be pressured by deteriorating liquidity expectations. BRN and Bitget Wallet's shared focus on the $73,000 support level highlights the importance of this price as a long and empty watershed. If the price effectively falls below this range, the downside risk will rapidly expand to $68,000 or less, which will completely change the market narrative at the end of the year. Investors need to be wary. The current downward trend is not a simple technical correction, but rather the result of pressure from both macro fundamentals and micro capital. Until the Federal Reserve's policy path is clarified, the Bitcoin market will continue to fluctuate amid uncertainty, and any attempt to bottom out will have to face the risk of a potential deep pullback.