Bitcoin jumped 4.5% on Wednesday after the latest US Consumer Price Index report came in cooler than expected, briefly pushing the price above $65,000 before it settled back. The move marks the strongest single-day gain in weeks for the largest cryptocurrency, though traders are watching whether the rally can hold above a key support level.
The CPI catalyst
The Bureau of Labor Statistics reported inflation data that showed price pressures easing more than economists had forecast. That sent a wave of buying across risk assets, with Bitcoin leading the crypto market higher. The 4.5% gain came in a single session, a sharp contrast to the sideways action of recent weeks.
Technical picture: wedge patterns and divergences
On the daily chart, Bitcoin emerged early from a falling wedge pattern, a formation that often signals a reversal. But the early exit raises the possibility of a fake-out. Meanwhile, the daily RSI is forming a potential rising wedge, with bullish divergence that may be playing out. That divergence, if confirmed, could give the rally more legs.
Key support sits at $64,500. If that level holds, the rally may continue toward $66,000 resistance and then $67,250. A break below $64,500 would put the recent gains in doubt.
Weekly outlook: trendline intact, $83K in sight
Zooming out to the weekly chart, Bitcoin remains above its bull market trendline and the 200-week simple moving average. A larger divergence on the weekly RSI suggests that if the indicator reaches the top of its channel, the price could rally to around $83,000. That's a long way from current levels, but the weekly structure is supportive.
For now, the immediate focus is on whether Bitcoin can hold $64,500. If it does, the path toward $66,000 and then $67,250 opens up. If not, the rally may prove short-lived.
