**Bitcoin’s Technical Analysis Overview** Bitcoin had a good week thanks to encouraging comments from Federal Reserve members and an executive order from Trump allowing cryptocurrencies in retirement plans. Fed’s Williams mentioned a potential rate cut in September, supported by Fed’s Daly and Kashkari, citing employment data. The executive order from Trump sparked a rally in Bitcoin and other cryptocurrencies. Now, all eyes are on the upcoming US CPI report, which could affect expectations for rate cuts. If the CPI is lower than expected, it might increase the chances of a September rate cut, possibly hinted at by Fed Chair Powell at the Jackson Hole Symposium. On the other hand, higher CPI numbers could lead to a cautious market reaction, which may impact risk assets. In technical terms, the daily chart shows that Bitcoin bounced back from a crucial trendline near the 112,000 level. It’s now pushing toward a downward trendline. Sellers may take positions above this line, while buyers hope for a breakout. The 4-hour chart points out resistance around the 116,000 zone; buyers are looking for a breakout, while sellers expect a dip. On the 1-hour chart, a small upward trendline shows positive momentum, with both buyers and sellers planning their moves around this trendline. **Potential Impact of the US CPI Report** Given the Fed’s dovish tone and potential new demand from retirement funds, we should brace for a significant market move. Currently, the market sees over an 80% chance of a 25 basis point cut in September, according to CME FedWatch data. With over $10 trillion in assets tied up in US 401(k) plans by early 2025, even a small investment in crypto could lead to consistent buying pressure. Next week’s US CPI report will be crucial for the Fed’s September decision. Remember how persistent inflation was in 2023 and 2024; an unexpectedly high CPI could damage recent market optimism. Conversely, a lower-than-expected reading would likely be reinforced by Chair Powell at Jackson Hole, boosting risk assets. Bitcoin has surged from the significant $112,000 trendline and is now challenging key downward resistance. This marks a decisive moment for derivative traders: a failure here could lead to short-term put buying, while a strong breakout might drive Bitcoin towards new all-time highs. A move above this trendline would negate the bearish outlook for now. **Strategies for Buying and Selling Bitcoin** For those considering a long position, the $116,000 area presents a possible entry point if there’s a pullback from resistance. However, if the price dips below this support, it could indicate weakness and reinforce the case for a drop back to the $112,000 trendline, which is a crucial level for buyers to hold. Due to the uncertain nature of the forthcoming CPI report, we are seeing rising implied volatility in the options market. Traders may want to explore buying straddles or strangles to take advantage of the expected price swings, profiting from significant movements in either direction. This strategy is effective when a big price shift is anticipated but the direction remains unclear. In the short term, we’ll focus on the minor upward trendline in the hourly chart for signs of momentum. If this line breaks, it could signal that the overhead resistance is holding, giving sellers a chance to act before a larger pullback occurs. Create your live VT Markets account and start trading now.

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