A bullish reversal pattern has emerged on bitcoin’s (BTC) daily price chart as traders await the U.S. inflation data set to be released on Wednesday, hoping it will bolster confidence in riskier assets.
Recently, BTC has faced significant losses, dropping from $100,000 last month to below $80,000 this week. Various factors have contributed to this decline, including growing risk aversion on Wall Street, apprehensions regarding Trump’s tariffs, and concerns over a potential U.S. recession. The lack of new BTC purchases tied to Trump’s strategic reserve plan further exacerbated the downward trend.
Nevertheless, as prices dipped to multi-month lows beneath $80,000 on Tuesday, the relative strength index (RSI)—a commonly used momentum indicator—did not validate this drop. Instead, it registered a higher low, which contradicts the lower low seen on the price chart, indicating a bullish RSI divergence.
This suggests that, despite falling prices, the momentum of the selling pressure is diminishing, which could indicate a potential shift towards a bullish trend.
This pattern arises at a particularly intriguing moment as the U.S. February consumer price index (CPI), set to be released at 12:30 UTC, is anticipated to reflect some positive developments. The bullish divergence of the RSI implies that BTC may respond favorably to a potentially soft CPI report.
Market expectations indicate that the headline CPI and the core CPI, which excludes food and energy, are projected to rise by 0.3% month-over-month in February. This would suggest an annualized increase of 2.9% for the headline CPI and 3.2% for the core index, both down by 0.1 percentage points compared to January.
“Tonight’s CPI figures could influence rate expectations, with markets now anticipating four cuts from the Fed this year, an increase from just one in January. Will the inflation data confirm this change, or will it introduce new volatility?” a Singapore-based crypto trading firm noted in a Telegram message.