Key takeaways
- The oversold technical conditions may limit the pace of the decline, but the broader market structure remains bearish.
- The structure will remain bearish unless BTC can reclaim the $64,000 region and build momentum back above key moving averages.
BTC Extends Losses Ahead of Key US Inflation Data Bitcoin (BTC) continued its decline on Wednesday, trading below $61,500 as renewed geopolitical tensions in the Middle East and persistent institutional selling kept risk sentiment subdued.
Investors are also preparing for the release of the US Consumer Price Index (CPI) data for May, which could significantly influence expectations for Federal Reserve policy.
Renewed Middle East tensions keep risk assets under pressure
Geopolitical concerns intensified after the United States conducted what it described as self-defense strikes against Iran following the downing of a US Apache helicopter in the Strait of Hormuz.
Iran’s Islamic Revolutionary Guard Corps (IRGC) responded by saying it had targeted an airbase in Jordan hosting US forces, as well as locations in Kuwait and Bahrain, and warned of further escalation if US actions continue.
Market participants are closely watching the upcoming US inflation data. Economists expect the May CPI report to show another increase in consumer prices, partly due to elevated energy costs linked to the Middle East crisis.
If inflation comes in hotter than expected, it could strengthen expectations that the Federal Reserve will maintain a hawkish stance and keep interest rates elevated for longer.
Higher borrowing costs tend to reduce liquidity and make yield-bearing assets more attractive relative to risk assets, potentially adding further pressure on Bitcoin.
Institutional demand remains weak. According to CoinGlass, US-listed spot Bitcoin ETFs recorded net outflows of $77.44 million on Tuesday, following $91.37 million in outflows earlier in the week.
These withdrawals extend a broader trend of persistent weekly outflows from spot Bitcoin ETFs, suggesting that large investors remain cautious amid macroeconomic uncertainty and geopolitical risks.
Bitcoin technical outlook: Bears retain control
The BTC/USD 4-hour chart is bearish and efficient as Bitcoin maintains a clearly bearish near-term structure.
Price remains well below all three major moving averages, while a former upward trendline near $73,004 has turned into resistance, reinforcing the view that the medium-term uptrend has been broken.
The RSI near 38 indicates oversold conditions that could slow the decline, but it does not yet signal a confirmed reversal.
The MACD remains in negative territory, although downside momentum appears to be moderating, increasing the risk of consolidation rather than an immediate recovery.
If the bulls regain control, immediate resistance is seen at the $64,004 level, with the $72,037 zone also posing as a strong supply zone.
No significant support levels are identified immediately below the current price in this setup, leaving BTC vulnerable to further downside if selling pressure persists.