Bitcoin is locked in a tense stalemate around $108,000. The recent Bitcoin gold divergence has faded after a brief rally failed to gain momentum. Consequently, traders are now looking ahead to critical inflation data for the next directional cue.
Bitcoin Gold Divergence
Earlier, Bitcoin dipped to $106,100, successfully closing the “gap” left on CME futures charts over the weekend. However, the subsequent bounce was weak. Meanwhile, gold continued its retreat, threatening to break below the key $4,000 support level. This reversal ended the recent pattern where Bitcoin rallied as gold fell.
The market is now experiencing choppy and illiquid conditions. Analysts note that bid liquidity is building below $107,000, providing a short-term floor. Yet, any attempt to push significantly higher meets immediate selling pressure. This creates a narrow trading range with volatile swings.
All Eyes on Inflation Data
The entire market’s focus has shifted to the upcoming Consumer Price Index (CPI) report. This is the first major economic data release since the U.S. government shutdown began. Therefore, it will be the Federal Reserve’s primary guide for future interest rate decisions.
A soft CPI print near 0.2% could reignite the “soft-landing” trade. This would likely boost risk assets like Bitcoin. Conversely, a higher number could reinforce hawkish Fed policy, extending the current market uncertainty. The result will be a major catalyst for volatility.
My Thoughts
This is a classic consolidation before a major news event. The failed rally shows a lack of conviction, but the solid support at $106K indicates sellers are also exhausted. The CPI print will be a make-or-break moment. A good number could easily send Bitcoin back towards $114,000, while a bad one might trigger a retest of $100,000.
