Bitcoin falls below $64K as bears take control

Bitcoin (BTC) is experiencing a significant market dip after failing to consolidate gains above key overhead resistance at $65,000. Currently trading around $64,044, the leading cryptocurrency shed approximately 1.6-1.8% in the last 24 hours, caught between taking profits at resistance and caution ahead of looming U.S. CPI inflation data.

Despite the current correction, contrasting on-chain signals shows that while retail traders are de-rising the market, whales continue their accumulate on this dip.

What’s driving the Bitcoin slump today?

In a nutshell, it was an attack on a stubborn resistance at $65,000 which subsequently resulted into cascading long liquidations ahead of the US inflation report due and surging oil prices. Why BTC is Down 4%: Below $64K Reached As $65K Rejected 1. Rejection at the $65,000-65,500 Resistance Overhead.

A critical hurdle continues to stand against Bitcoin – the $65,000 to $65,500 range, which the bulls previously intended to use as a support area.

As BTC’s price made it up to $65,300, massive sell wall orders absorbed the bulls’ pressure, preventing them from breaking through. Unfortunately, the failure of Bitcoin bulls to claim $65,000 turned automatic sells on the table, prompting immediate liquidations by some shorts.

2. Pre-CPI Caution Keeps Markets Defensive.
Ahead of the scheduled US Consumer Price Index (CPI) report tomorrow, traders have opted to reduce their exposure, including both in stock and cryptocurrency markets. Typically, a higher inflation reading than expected may lead to higher U.S. Treasury rates and an increase in the US Dollar Index (DXY).

Given their correlations, both usually reflect unfavorable conditions for riskier assets like cryptocurrencies.

3. Escalating Energy Prices and Geopolitical Risks.
As tensions in the Middle East escalate in areas including the Strait of Hormuz, the prices of crude oil continue to increase, posing inflation concerns. This rise in energy cost naturally leads to a wider inflationary threat, making rate cut hopes less probable from Federal Reserve officials who are worried about inflation control. Such environment usually encourages institutional money managers to curb their exposure to cryptocurrencies.

Bitcoin breaks $65,000: 4 factors fueling today’s BTC price surge

A massive 2% drop from Bitcoin’s high touched at ~$65,300 is more likely a direct trigger for many leveraged long orders being liquidated around $63,750. Bitcoin price fell further to below the $64K mark with increased selling pressure coming from short-term market makers dumping some Bitcoin supply due to automatic margin calls that force users to close trades.