Bitcoin hangs around $78,000, CPI report approaches Fed meeting

The cryptocurrency market regained downward pressure on Thursday

On Thursday, the cryptocurrency market once again showed a downward trend, with Bitcoin falling to a key support level close to US$78,000 for testing. Major altcoins followed the trend, with Ethereum approaching $2,470 and XRP slipping to about $1.37.

Market sentiment remains resilient during the retracement

Despite the market downturn, investors 'risk appetite remains strong. The Crypto Fear and Greed Index rose from 66 to 70, reflecting continued optimism and keeping market sentiment firmly in the "greedy" range. This positive sentiment could lay the stage for future breakthroughs, although global economic and geopolitical uncertainties continue to pose risks to short-term stability.

Analysts said the current focus is on whether the correction is a healthy correction or a harbinger of more severe market pressures. Continued confidence can support market resilience, but volatility remains a concern for traders. The market's ability to reverse significantly after experiencing sharp fluctuations suggests that investors have reassessed the value of Bitcoin in the current environment.

Bitcoin consolidation reflects shift in valuation

In the past two weeks, Bitcoin has traded mainly horizontally within narrow ranges, consistently defending support levels around $77,000. Currently, the cryptocurrency is not threatening a downward breakthrough, but is testing the upper edge of its consolidation range.

Several risk factors, including escalating tensions in the Middle East, have led to more cautious market dynamics. Iranian-backed Houthi forces have stepped up attacks on Saudi Arabia's energy infrastructure and Red Sea shipping routes, pushing up crude oil prices and prompting some investors to reduce exposure to their sensitive assets. If conflicts deepen or energy costs continue to rise, cryptocurrencies such as Bitcoin may face further selling pressure as inflation concerns intensify.

Explanation of terminology: Houthi

Houthi is a political and armed movement originating in Yemen and allied with Iran that has been involved in conflicts throughout the Middle East and is seen as a key disruptor in the region, particularly in terms of energy and shipping security. [TAG

Macroeconomic Events Pave Way for Volatility

Eyes now turn to key U.S. economic events: The Consumer Price Index (CPI) report is due Friday, and the Fed's interest rate decision is expected Wednesday. Bitcoin's sensitivity to changes in U.S. monetary policy expectations has increased significantly. Initially benefiting from dovish signals from the Fed, strong employment data reversed earlier gains, leaving bitcoin almost flat for the week. Research firm K33 Research highlighted that upcoming Producer Price Index (PPI), CPI releases, and Federal Open Market Committee (FOMC) meetings will be the main volatility triggers for Bitcoin and broader crypto assets.

In addition, the Senate's September 15 closure vote on the CLARITY Act, the emerging regulatory framework for digital assets in the United States, may have an impact on the entire industry. If inflation data justifies lowering interest rates, Bitcoin and other cryptocurrencies may see new upward momentum. Conversely, stronger data may strengthen expectations of restrictive monetary policy and increase the risk of further declines.

Technical outlook: Key supports and indicators

On Thursday, although Bitcoin remained below US$78,000, it continued to remain above the major exponential moving average (EMA), supporting the overall bullish trend. However, momentum indicators suggest that the market is consolidating rather than preparing for an immediate breakthrough.

The Relative Strength Index (RSI) fell back from overbought to around 58, meaning that while buying pressure cooled, it remained moderately positive. In contrast, negative readings for the Smooth Similarity Moving Average (MACD) indicator deepened, reflecting weakening upward momentum and the possibility of further range activity. Bitcoin trading prices are below the US$78,094 support level, with the US$77,000 area serving as a short-term bottom. The 200-day EMA of around US$72,923 and the 50-day EMA of close to US$72,764 are closely aligned, and a further decline in prices will create a critical demand area.

Next, the 100-day EMA of approximately US$70,727 represents an important support level. A clear break below this threshold may indicate a more significant change in Bitcoin's underlying trend. To resume bullish outlook, the MACD needs to be stable and the RSI is trending upward, which could point to increased momentum and another possible rise in Bitcoin.