Crypto markets are in a phase of strategic waiting. With the US shutdown impacting economic data and Beijing easing export controls, Bitcoin and Ethereum are trading in narrow ranges. Friday's CPI report could be a game-changer.
The Consumer Price Index report scheduled for Friday represents the primary macroeconomic event markets are awaiting this week. Analysts anticipate a reading that could significantly influence the Fed’s monetary policy trajectory. Lower-than-expected inflation could propel Bitcoin above the $114,000 resistance, while a bullish surprise could pull prices back toward the support level of $104,000.
From a technical perspective, BTC appears to be heading toward its resistance zone between $114,800 and $112,000. Caution is warranted in this area while monitoring for a potential reversal. Another rejection from this zone would signal a negative outlook. Indeed, previous CPI reports have consistently marked local tops.
A rejection from this liquidity zone would indicate sellers regaining control over buyers. If Bitcoin fails to maintain its $110,000 support afterward, a new low below $104,000 or even $100,000 is highly probable before next Wednesday’s FOMC meeting.
In case of a breakout above $113,800, the next targets to watch are $115,000 to $116,000.
Correlations between Bitcoin and traditional stock indices remain high, around 0.75 with the Nasdaq. This dependency on macro data means the CPI will have a direct impact on crypto investor sentiment. Trading volumes have dropped by nearly 30% this week, confirming this widespread wait-and-see phase.
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Signals of moderation from Beijing represent a positive development for all risk assets, cryptocurrencies included. China’s decision to limit escalation on export controls comes after several months of increased trade tensions. For the crypto market, this development reduces the risk of a systemic shock that could have triggered a flight-to-quality toward traditional safe-haven assets.
The Asian market has historically represented a significant portion of global crypto volume. Geopolitical stability between the world’s two largest economic powers fosters an environment conducive to investments in digital assets. Inflows to American Bitcoin spot ETFs have slowed this week but remain positive, with nearly $150 million in net purchases since Monday.
The Ethereum ecosystem also benefits from this relative stability. Staking yield remains around 3.2%, attracting institutional investors seeking returns uncorrelated with traditional markets. The Dencun upgrade continues to produce its effects with consistently decreasing transaction fees on the layer 1, enhancing the network’s attractiveness for DeFi applications.
The absence of fresh US economic data creates an unusual information void for traders typically guided by weekly statistics. Jobless claims, retail sales, and other leading indicators remain unavailable, forcing investors to focus exclusively on price action and technical levels.
On the chart, Bitcoin has broken through $110,000 and is targeting its POC at $111,400. The daily RSI is in the neutral zone at 44, indicating neither overbought nor oversold conditions. Volumes remain anemic, a typical pattern in consolidation phases preceding more pronounced directional movements.
Ethereum shows a similar structure with a well-defined range between $3,700 and $4,100. The ETH/BTC ratio has slightly deteriorated in recent weeks, reflecting investors’ preference for Bitcoin during periods of uncertainty. Nevertheless, Ethereum fundamentals remain solid with sustained on-chain activity and continued growth of layer 2 applications.
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Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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