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Key points:
Bitcoin price fell 1.7% over the last 24 hours after running into resistance above $108,000.
Chances of Fed rate cuts on June 18 have all but disappeared.
The BTC/USD pair could drop further if the support at $106,000 is lost.
Bitcoin’s (BTC) price has dropped by over 1.70% over the last 24 hours below $108,000 as Federal Reserve rate cut possibilities for June fade.
Data from Cointelegraph Markets Pro and Bitstamp shows Bitcoin price trading in a third straight bearish session, suggesting increasing downward momentum.
BTC/USD daily chart. Source: Cointelegraph/TradingViewBitcoin drops on fading rate cut odds
Bitcoin price began dropping during the New York trading hours on June 11 after US Consumer Price Index (CPI) data came in cooler than expected at 2.4% year-over-year against the forecast 2.5%. Core CPI also beat estimates at 2.8% against expectations of 2.9%.
“Even as the overall inflation rate has dropped, prices for many necessities are still rising rapidly,” said capital markets commentator The Kobeissi Letter in a June 11 post on X, adding:
“Americans are sick of inflation.”While May CPI inflation was 2.4%, inflation is much higher in many basic necessities:
1. Utility Gas Inflation: +15.3%
2. Car Insurance Inflation: +7.0%
3. Meat and Eggs Inflation: +6.1%
4. Car Repair Inflation: +5.1%
5. Electricity Inflation: +4.5%
6. Homeowner Inflation: +4.2%…
As a result, the US Dollar Index (DXY) fell to a multimonth low of 98.5 and wiped out the chances of the US Federal Reserve’s interest rate cut next week.
Markets are pricing a 99.8% chance that interest rates will remain unchanged during the June 18 FOMC meeting, as per the FedWatch tool. The number of possible interest rate cuts in 2025 has narrowed to only two, with the earliest expected in September.
Target rate possibilities for June 18 FOMC meeting. Source: FedWatch toolInvestors’ focus has now shifted to the US Producer Price Index (PPI) data, which is due to be released on June 12. The PPI is expected to rise by 0.2% month-over-month, with the core PPI at 0.3%.
A higher-than-expected PPI or a surprise macroeconomic development could amplify Bitcoin’s sell-off based on historical trends.
Bitcoin runs into resistance near all-time highs
BTC price is fighting resistance from the supplier congestion zone between $108,800 and its all-time high just below $112,000. Bitcoin bulls are required to flip this level back into support to usher BTC into price discovery.
The BTC/USD pair is still validating a bull flag pattern on the daily time frame with support at $106,000, or the upper boundary of the flag.
BTC/USD daily chart. Source: Cointelegraph/TradingViewMeanwhile, the relative strength index (RSI) is facing down and has dropped to 56 from 64 over the last four days, indicating decreasing bullish momentum.
Therefore, a daily candlestick close below the support level at $106,000 would invalidate the bull flag setup. If this happens, the BTC/USD pair could drop back into the confines of the flag channel, where it could continue consolidating for a few more days.
Related: Peter Brandt’s 75% Bitcoin crash scenario ‘very unlikely’: Analyst
As Cointelegraph reported, Bitcoin must avoid dropping below $100,000 over the next few days if the support at $106,000 gives in. Conversely, holding above this level could see Bitcoin rebound to new all-time highs.
Source: AlphaBTC“Bitcoin couldn’t break through the $110,000 area and therefore, we should have some correction,” MN Capital founder Michael van de Poppe said in his latest analysis on X, adding:
“As long as Bitcoin stays above $106,000, then there's nothing to worry about.”
BTC/USD four-hour chart. Source: Michael van de PoppeThis article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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