Bitcoin (BTC) Price Prediction: Downside Risks Hold BTC Back

Bitcoin (BTC) price prediction showed a continued correction following the release of US Consumer Price Index (CPI) data on Wednesday. A 4% retreat put the largest cryptocurrency at $58,730 ahead of the American session.

Bitcoin (BTC) price continued its correction on Wednesday after the release of US Consumer Price Index (CPI) data. A 4% decline brought the largest cryptocurrency to $58,730 during the American session.

Among altcoin majors, Ethereum (ETH), Solana (SOL), and Ripple (XRP) dropped 3.1%, 4%, and 1.6%, respectively, underscoring market headwinds.

Bitcoin price dropped sharply after CPI data. What’s next?

Bitcoin price soared past $61,000 and approached the $62,000 resistance ahead of the CPI report. According to the Bureau of Labor Statistics (BLS), inflation cooled to 2.9% year-over-year, while Core CPI held steady at 3.2%.

Economists expect the Federal Reserve to cut interest rates by 25 basis points in September based on this data, a move that could ease pressure on risk assets like Bitcoin.

Despite optimism for a rate cut, BTC price faced selling pressure, briefly dropping below $60,000 after the report. The CPI report is typically followed by intense volatility, suggesting a further drop to $54,000 before a larger move up.

Coinglass data on CME BTC futures open interest (OI) showed a 5% decline to $8.36 billion, potentially indicating a price drop. Traders’ conviction in the market reversal is waning, with few traders willing to keep positions open. According to a previous BTC price prediction, the largest digital asset tends to drop as CME futures OI decreases.

Crucial support for Bitcoin price, according to IntoTheBlock's IOMAP model, is found between $54,955 and $56,695. In this range, 874.5k addresses purchased 585.78k BTC, creating demand that could propel BTC toward $70,000.

The most critical zone, however, spans $63,728 to $65,468, where 1.61 million addresses bought 944.51k BTC.

A breakout from this zone is necessary to invalidate the bearish thesis, giving bulls the green light to cultivate the next rally to all-time highs (ATH) and beyond. If this supply zone holds, BTC risks stalling between $58,000 and $64,000.

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