Bitcoin Holds Above $117K Despite Inflation Fears as BTC Tests Critical Support

Quick Take

• BTC currently trading at $117,900 (+0.36% in 24h)
• Bitcoin’s RSI at 52.33 signals neutral momentum after recent pullback from all-time highs
• Higher-than-expected U.S. inflation data sparked 4% decline from record $124,514 peak

What’s Driving Bitcoin Price Today?

The BTC price experienced dramatic swings this week, reaching a new all-time high of $124,514 before retreating to current levels around $117,900. The initial surge was fueled by a weakening U.S. dollar and growing expectations of Federal Reserve interest rate cuts, creating favorable conditions for risk assets like Bitcoin.

However, the rally was short-lived as higher-than-expected U.S. wholesale inflation data spooked markets, triggering a sharp 4% decline from the peak. This reaction highlights Bitcoin’s continued sensitivity to macroeconomic data, particularly inflation metrics that could influence Fed policy decisions.

Despite the pullback, institutional investment continues to provide underlying support for the BTC price. Corporate purchases and favorable regulatory developments under the current administration have maintained positive momentum, with crypto exchange Bullish’s successful NYSE debut reaching a $10.2 billion valuation serving as a testament to renewed institutional interest.

Treasury Secretary Scott Bessent’s recent comments added another layer of complexity to Bitcoin sentiment. While initially stating the government wasn’t planning additional Bitcoin purchases, his clarification about remaining “open to acquiring more bitcoin through budget-neutral pathways” suggests policy flexibility that could benefit long-term BTC adoption.

Bitcoin Technical Analysis: Mixed Signals Emerge

Bitcoin technical analysis reveals a market in consolidation after the recent volatility. The BTC RSI currently sits at 52.33, placing it firmly in neutral territory and suggesting neither overbought nor oversold conditions. This neutral positioning provides room for movement in either direction based on upcoming catalysts.

The MACD histogram shows a bearish divergence at -60.56, indicating weakening bullish momentum despite the overall uptrend. Bitcoin’s MACD line at 858.15 remains below the signal line at 918.71, suggesting short-term bearish pressure may persist.

Moving averages paint a more constructive picture for Bitcoin technical analysis. The BTC price trades above the 20-day SMA ($116,937) and significantly above the 200-day SMA ($100,279), confirming the long-term bullish structure remains intact. The 7-day SMA at $119,006 currently acts as immediate resistance.

Bitcoin’s Bollinger Bands position at 0.60 indicates the price sits in the upper portion of the trading range, with the upper band at $121,866 providing key resistance and the lower band at $112,007 offering support.

Bitcoin Price Levels: Key Support and Resistance

Critical Bitcoin support levels emerge at $111,920 for immediate support, with stronger backing at $105,100. These levels align with previous consolidation zones and represent areas where institutional buyers have historically stepped in.

On the upside, BTC resistance appears formidable at $124,474, which encompasses the recent all-time high area. Breaking above this level would likely trigger renewed FOMO buying and potentially push Bitcoin toward the next psychological milestone at $130,000.

The current trading range between $117,144 and $118,231 represents the immediate battlefield for Bitcoin bulls and bears. A decisive break below $117,000 could accelerate selling toward the $111,920 support, while a push above $118,500 might signal renewed bullish momentum.

Should You Buy BTC Now? Risk-Reward Analysis

Based on Binance spot market data, the current BTC/USDT setup presents a complex risk-reward scenario for different trader types. Swing traders might consider the neutral BTC RSI and oversold stochastic readings as potential entry signals, particularly if Bitcoin support levels at $111,920 hold firm.

Conservative investors should note that Bitcoin’s position above key moving averages maintains the long-term bullish structure, making dollar-cost averaging strategies potentially attractive at current levels. The 24-hour ATR of $2,787 suggests continued volatility, requiring careful position sizing.

Active traders should monitor the $117,000 level closely, as a break below could trigger stop-losses and accelerate the decline toward $111,920. Conversely, a reclaim of $119,000 with volume could signal the correction is complete.

Risk management remains crucial given the macroeconomic uncertainties. The inflation data reaction demonstrates Bitcoin’s continued correlation with traditional risk assets during stress periods, making position sizing and stop-loss placement essential for any BTC positions.

Conclusion

The BTC price consolidation around $117,900 reflects a market digesting recent gains while weighing conflicting signals from institutional adoption and inflation concerns. With Bitcoin’s RSI in neutral territory and key support holding, the next 24-48 hours will likely determine whether this represents a healthy pullback or the start of a deeper correction. Traders should watch for decisive breaks above $119,000 or below $117,000 for directional clues, while keeping close attention to upcoming economic data that could influence Fed policy expectations.

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