I can't hold on any longer; BTC surged 7% since last Sunday, but when it hit 72000, it felt like being held down, stuck in a repetitive grind, unable to go up or down. Do you think it's a technical issue?
Actually, it's not; everyone is waiting for two bombs to drop.
The first bomb is today's March CPI. This data is likely to look bad, as the PPI has already submitted its report early, with a month-on-month increase of 0.7%, directly doubling the market expectation of 0.3%. Energy prices are the main culprit.
The year-over-year CPI is expected to be 3.4%. If the core CPI exceeds the expected line of 2.7% again, the Federal Reserve won't just talk about lowering interest rates; the ghost story of rate hikes will start again.
Thielen from 10x Research stated that the market is currently pricing in a 2.5% fluctuation for BTC after the CPI is released, which translates to a range of 70200 to 73800. It may not seem large, but leveraged players are in for a big deal.
The second event is the US-Iran negotiations in Islamabad over the weekend.
The ceasefire agreement is already cracking; Israel is still bombing Lebanon, and Saudi facilities have also been hit. Brent crude oil rose another 2% on Friday, hitting 97 dollars.
It has been agreed, the Strait of Hormuz is back open, oil prices are dropping, the inflation narrative is cooling, BTC is directly taking off. If talks break down, oil prices will surge above 100, inflation expectations will worsen, and risk assets will be the first to suffer.
Interestingly, the signals from the options market.
The open interest for the 80000 call options on Deribit has exceeded 1.6 billion dollars; whales are betting heavily on the upside. The demand for the IBIT-linked 45 dollar call (expiring in May) is also strong, with traders betting that IBIT will rise from 40 dollars to above 45. But what about the other side?
The demand for put options has not decreased at all; the skew across all time frames is negative. What this translates to is: large funds want to make money on top, while those below are afraid of losing money, both sides are hedging, and there is no consensus on direction.
Just do the math and you'll see, the max pain is at 69000, but the probability of expiration above 71500 is over 91%, and the short-term support below remains solid.
The core contradiction is simple: the ceasefire is favorable and ETF funds are returning to support, but inflation data and geopolitical variables could crash the market at any time.
My judgment for this wave: the trend is slightly bullish, but positions should be light. Do not take action before the CPI is released; there are two scenarios to operate after the data hits.
If CPI exceeds expectations, it could crash to 69000-70000; go long directly, stop loss at 68000, first target 74000, and if the negotiation goes well, look for 80000.
CPI below expectations caused BTC to directly rise past 73000; confirm on the right side before entering again, stop loss at 71500, target also at 80000.
Keep positions within 20%, do not increase positions before the weekend negotiation results are out.
#Tonight's CPI: Interest Rate Cut Expectations vs Tariff Inflation, Who Wins $BTC
