BTC Holding at Support – Bearish Risks Remain

Bitcoin prices remain muted as we kick of the new week with the futures market still hugging support at the 91,750 level. On the back of heavy selling last week, the market remains vulnerable to fresh downside this week, particularly if we see any fresh USD data strength. A solid set of jobs figures on Friday has seen traders pricing out a Q1 rate cut, with USD rallying accordingly. Against this backdrop, BTC remains vulnerable as part of the broader risk complex.

US Inflation on Watch

Inflation will now be key to watch this week with BTC at risk of a fresh drop lower if we see a further rise in US consumer prices, as forecast. An uptick in CPI should see the market further pushing out rate-cut projections beyond June, keeping USD well bid near-term. On the other hand, any downside surprise in the data would be welcomed by BTC bulls here. Given the estimate for headline CPI at 2.9% from 2.7% prior, there is room for an undershoot. If confirmed at that level, however, USD is likely to be sharply higher this week, creating further headwinds for BTC.

Trump Impact

Looking beyond incoming US data this week, Trump’s inauguration at the weekend will be the next focus point. Crypto bulls are looking for Trump to make some early bullish moves for the market to revive the buying spree we saw across most of Q4. If Trump doesn’t make any early moves or noise on crypto, however, BTC could well correct much deeper here as traders react with disappointment, particularly institutional players long via ETF exposure.

Technical Views

BTC

Recent price action is looking very toppy here with the market potentially carving out a head and shoulders pattern. If the neckline at 91,750 breaks, we could see a sharp move lower. Interim support at 86,645 is the only notable level ahead of a retest of the early 2024 highs around 74,655. Bulls need to get back above 100k near-term to alleviate bearish risks.