The sudden surge in Bitcoin price has caught many off guard, as it climbed towards the $73,000 mark despite the US CPI hitting a 22-month high. This unexpected reaction has left traders questioning why the markets are rallying on what appears to be bearish data.
The latest US CPI figures exceeded expectations, coming in at approximately 3.5% YoY, the highest level in almost two years. Normally, such high inflation rates would signal a more hawkish Federal Reserve and potentially lead to a downturn in risk assets like Bitcoin. However, the market response was different this time.
Instead of a negative impact, the CPI data acted as a catalyst for repositioning. Bitcoin and equities moved higher as uncertainty dissipated, with traders already positioned cautiously ahead of the release.
Bitcoin has reclaimed the $70K–$72K range high and is now testing it as support, indicating a potential breakout attempt. Momentum indicators support this move, with RSI trending above 60 and CMF showing steady capital inflows. However, the price faces a major resistance zone near $75K, which could lead to a pullback if not sustained.
Despite the hot CPI data, Bitcoin did not experience significant selling pressure. Buyers stepped in at key levels, leading to a breakout above crucial resistance levels. This suggests that the market was under-positioned for upside movement, potentially triggering a short squeeze.
Looking ahead, if Bitcoin holds above the $70,000 to $72,000 range, continuation towards $75,000 is likely. However, a failure to sustain this level may result in a pullback and consolidation.
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