The Bitcoin (BTC) price is at 71,552 USD after forming a positive continuation pattern on the daily chart indicating a possible rise of 11%.

Friday's American CPI report for March is expected to show that inflation increases to 3.3% year-on-year. But an increase of about 1,300% in weekly Bitcoin ETF inflows and larger outflows from exchanges shows that the demand for BTC can handle this headwind.

Bitcoin price forms a positive pattern as ETF inflows increase significantly

Between the end of March and April 7, the Bitcoin price formed a cup-and-handle formation on the daily chart. It is a positive pattern where a rounded recovery forms the cup and a slight decline creates the handle before a possible rise. The rounded bottom of the cup occurred during the correction at the end of March. The current decline from the peak on April 7 shows the handle. The pattern also indicates a possible rise of 11% if confirmed.

The volumes also fit into the picture. Sell pressure has been clearly lower during the formation of the handle than the buying volume that lifted the cup. Decreased volumes during the handle are common for this pattern. It shows that sellers are becoming fewer rather than gathering strength.

Do you want to get more token news? Sign up for Harsh Notariya's crypto newsletter here.

Institutional flows reinforce this pattern. Weekly inflows in Bitcoin ETF increased from 22.34 million USD in the week ending April 2 to 312.27 million USD in the week ending April 7. This is an increase of about 1,300%.

The rise came when Morgan Stanley plans to list its MSBT spot Bitcoin ETF on April 8 with a cost percentage of 0.14%, which is the lowest among all spot BTC funds.

However, ETF flows do not prove that participants in the spot market show the same conviction.

Outflows from exchanges are increasing as spot buyers accumulate.

Spot demand is increasing alongside ETF inflows. The exchange's net position change, which tracks Bitcoin in and out of exchanges, went from -30,727 BTC on April 6 to -37,472 BTC on April 7. The negative value means that more Bitcoin has left exchanges than has come in. Outflows increased by 22% in one day. It shows that holders are likely moving BTC to storage at a faster pace.

Reduced supply on exchanges makes the availability more limited for spot buyers. As ETF inflows rise while balances on exchanges decrease, the situation improves for continued upward movement. The combination also suggests that real demand is driving the market and not just speculation with leverage.

Both institutional and spot flows now support the BTC rally. Thus, the price chart becomes crucial for whether the signals lead to a breakout or stall.

Important price levels for Bitcoin as Friday's CPI approaches

The resistance level of the cup-and-handle pattern is at 73,238 USD and coincides with the Fibonacci level 0.618. Here, previous movements often stall or continue. A daily close above this level would confirm the pattern and open up a move towards 78,383 USD, about 7% higher than the resistance. The entire breakout forecast for the pattern is an increase of 11%.

Before the resistance level, Bitcoin must clearly reclaim 71,649 USD at the Fibonacci level 0.5. A closing price above that level shows that the handle is complete.

The cup-and-handle pattern after strong recoveries has a particular characteristic. The handle must remain above the cup's midpoint for the pattern to be valid. The current handle is clearly above the midpoint, so the pattern holds together.

Friday's CPI figures present two possible outcomes. If BTC rises despite a high 3.3% outcome, it reinforces the picture of Bitcoin as an inflation hedge.

If the number leads to selling pressure, the decline may stay within the handle's range instead of breaking the pattern, as ETF and spot flows provide support as mentioned above.

On the downside, 70,060 USD at the 0.382 Fibonacci level is the first support line for Bitcoin. If the price drops below 68,093 USD, the formation's handle is clearly weakened. If the price goes below 64,915 USD at the cup's bottom, the entire pattern becomes invalid.

Right now, 73,238 USD separates a confirmed breakout from 78,383 USD from a retreat down into the handle and a potential new test of 68,093 USD.