Key points:
- Bitcoin dropped 1.7% in the past 24 hours after facing resistance above $108,000.
- The likelihood of Fed rate cuts on June 18 has nearly vanished.
- A drop below the $106,000 support could lead to further downside for BTC/USD.
Bitcoin’s price has declined by more than 1.7% over the past 24 hours, slipping below $108,000 as hopes for a Federal Reserve rate cut in June diminish.
According to data from Cointelegraph Markets Pro and Bitstamp, Bitcoin is now in its third consecutive bearish session, indicating mounting downward pressure.
Bitcoin Falls as Hopes for Rate Cut Diminish
Bitcoin’s price began to decline during New York trading hours on June 11, following the release of U.S. Consumer Price Index (CPI) data that came in cooler than expected. Headline CPI rose 2.4% year-over-year, slightly below the forecast of 2.5%, while Core CPI also surprised to the downside at 2.8%, compared to the expected 2.9%.
“Even though the overall inflation rate has eased, prices for many essential goods continue to rise sharply,” noted capital markets commentator The Kobeissi Letter in a June 11 post on X.
“Americans are sick of inflation.”
As a result, the U.S. Dollar Index (DXY) dropped to a multi-month low of 98.5, effectively eliminating the likelihood of an interest rate cut by the Federal Reserve next week.
According to the FedWatch tool, markets are now pricing in a 99.8% probability that rates will remain unchanged at the June 18 FOMC meeting. Looking ahead, expectations for rate cuts in 2025 have been reduced to just two, with the earliest anticipated in September.
Investor attention has now turned to the upcoming U.S. Producer Price Index (PPI) data, set for release on June 12. Forecasts suggest a 0.2% month-over-month increase in PPI, with core PPI expected to rise by 0.3%.
Historically, a higher-than-expected PPI or an unexpected macroeconomic shock could intensify Bitcoin’s sell-off.
Bitcoin Faces Resistance Near Record Highs
BTC price is currently contending with resistance in the supply congestion zone between $108,800 and its all-time high just below $112,000. For Bitcoin to enter a new phase of price discovery, bulls need to reclaim this zone as support.
On the daily chart, the BTC/USD pair continues to validate a bull flag pattern, with key support holding at $106,000—marking the upper boundary of the flag formation.
Meanwhile, the Relative Strength Index (RSI) has declined from 64 to 56 over the past four days, signaling weakening bullish momentum.
A daily close below the $106,000 support level would invalidate the bull flag pattern. In that case, the BTC/USD pair could fall back within the flag’s channel and enter a period of consolidation lasting several more days.
As previously noted, it’s crucial for Bitcoin to stay above $100,000 if $106,000 support fails. On the other hand, maintaining support above $106,000 could pave the way for a rebound toward new all-time highs.
“Bitcoin failed to break through the $110,000 zone, so a correction is likely,” 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.”
