Bitcoin jumps on softer CPI, but the $70K wall refuses to break
Bitcoin’s latest rally has injected fresh optimism into the market, but beneath the surface, the battle between bulls and bears is only getting sharper. Cooling inflation data out of the United States has lifted risk sentiment, yet Bitcoin still finds itself locked below a heavy resistance band just under the crucial $70,000 mark.
The broader macro backdrop has been anything but quiet. In recent weeks, a steady stream of economic reports has repeatedly jolted sentiment across risk assets, including crypto. Despite this, Bitcoin [BTC] has held above its early‑February low near 59,000 dollars, repeatedly rebuffing deeper downside. For many traders, this price resilience raises a key question: Is BTC carving out a durable bottom, or just setting up for another bull trap?
Earlier, a stronger‑than‑anticipated U.S. jobs report underscored the robustness of the labor market. That data point complicated expectations around the timing and pace of potential interest rate cuts, splitting opinion across macro and crypto circles. On one side, optimists argued that economic strength leaves room for a “soft landing.” On the other, skeptics warned that such resilience could delay monetary easing, keeping financial conditions tight for longer and weighing on risk assets.
The narrative swung again when the Consumer Price Index (CPI) figures dropped on 13 February. Headline inflation printed at 2.4% year‑on‑year, slightly below the 2.5% consensus estimate. That marginal beat was enough to tilt the mood back in favor of Bitcoin bulls, who interpreted it as evidence that price pressures are continuing to cool, potentially giving central bankers more room to pivot toward a looser stance over time.
Bitcoin’s price reacted almost instantly. By the close of that session, BTC had gained roughly 3.93%, its strongest intraday advance in about two weeks. The move dealt a serious blow to traders positioned on the downside. Short positions bore the brunt of the move, accounting for about 85% of the roughly 267 million dollars in total liquidations. On paper, that looks like a strong bullish signal. In practice, however, it raises a red flag: a rally dominated by forced short covering rather than organic spot demand often struggles to sustain itself.
This is where the technical picture becomes crucial. While Bitcoin has managed to rebound sharply, bears continue to defend a dense liquidity pocket in the 70,000–75,000 dollar region. On‑chain metrics show that a large cluster of short‑side liquidity has accumulated there, representing an estimated 150 million dollars’ worth of potential BTC selling pressure. Until price can break above this zone with conviction and hold it as support, the risk remains that every sharp move up is simply another short squeeze, not the beginning of a structural uptrend.
Funding rates provide another important clue. Despite the recent price strength, Bitcoin’s funding rates have stayed in negative territory, signaling that perpetual futures markets are still skewed toward short positions. This persistent bias suggests that many traders remain skeptical of the rally and are actively betting against a sustained breakout. For bulls, this is a double‑edged sword: on one side, heavy short positioning can fuel explosive upside if liquidations snowball; on the other, it betrays a lack of broad‑based conviction on the long side.
At the same time, there are early signs of renewed accumulation around current price levels. Bitcoin‑backed exchange‑traded funds recently flipped from two straight days of net outflows to a modest 15 million dollars in net inflows. While this is far from a tidal wave of institutional demand, it signals that some large investors are beginning to selectively re‑enter the market. Still, the magnitude of these flows is not yet strong enough to single‑handedly drive Bitcoin through stiff overhead resistance.
Looking at the bigger picture, U.S. investors in particular appear cautious. Even though the latest CPI print offered some relief, a sizeable portion of the market seems to be anticipating a corrective move before committing meaningful fresh capital. That wait‑and‑see approach is consistent with the broader macro uncertainty: traders are trying to balance cooling inflation against lingering concerns about growth, policy timing, and the potential for renewed volatility across global markets.
From a pure price‑action standpoint, the near‑4% jump following the CPI report looks, for now, more like a liquidity event than the start of a fundamentally driven trend. Short squeezes can be powerful, but they are typically transient unless backed by sustained spot buying, stronger ETF inflows, and improving broader risk appetite. If these supportive factors fail to materialize, momentum could easily swing back in favor of the bears, leaving over‑leveraged longs particularly vulnerable.
For traders, the 70,000–75,000 dollar band has effectively become the line in the sand. A decisive break and consolidation above this zone would signal that bulls have finally absorbed the concentrated sell pressure and forced shorts to capitulate. That scenario could open the door to a renewed push toward prior highs and, potentially, new price discovery. Conversely, repeated rejections from this area would reinforce it as a major supply zone, increasing the likelihood of a deeper retracement toward previously tested support levels.
The current setup also highlights an important distinction between headline‑driven moves and structural trends. Macro surprises, like a softer CPI or a hot employment report, can shift sentiment within hours. However, long‑term Bitcoin cycles tend to be driven by slower forces: halving events, long‑term holder behavior, regulatory clarity, and the gradual integration of BTC into traditional financial products. In the near term, macro data may dominate intraday volatility, but sustained bull or bear markets are rarely built on single economic releases.
Another layer to watch is how derivatives markets evolve from here. If funding rates remain negative even as price creeps higher, pressure on short sellers could intensify, potentially setting up another round of liquidations. However, if funding flips positive too quickly and leverage leans heavily long while price stalls below resistance, the risk of a sharp flush lower increases. For active traders, tracking changes in open interest, funding, and liquidations around the 70,000 dollar threshold will be critical.
Long‑term investors, in contrast, may view the current chop as part of a broader accumulation phase. From that perspective, volatility driven by CPI releases and jobs data is less of a threat and more of an opportunity to build exposure at a discount to potential future highs. Still, even for long‑horizon participants, risk management remains essential, especially in an environment where macro conditions can change rapidly and regulatory headlines can appear without warning.
Psychology is also playing a major role. The round number of 70,000 dollars is not just a technical barrier; it is a psychological milestone loaded with expectations from previous cycles. Many participants who entered near or above prior peaks may be eager to exit at break‑even, adding to selling pressure as price approaches the level. At the same time, new buyers may be hesitant to commit large sums just below an area that has repeatedly acted as a ceiling. This tug‑of‑war between fear of missing out and fear of another drawdown is contributing to the current stalemate.
In the coming weeks, Bitcoin’s path will likely depend on whether improving macro signals can translate into sustained risk‑on behavior. Additional confirmation of cooling inflation, clearer guidance on rate‑cut timing, or stronger inflows into BTC‑related investment products could all help tilt the scales toward a breakout. On the flip side, any upside surprise in inflation, renewed concerns over growth, or a sharp reversal in equities could quickly undermine the fragile confidence supporting the latest move.
For now, the market sits at a crossroads. Bitcoin has shown impressive resilience by holding above its early‑February lows and responding positively to softer inflation data. Yet, until it can punch through the dense band of liquidity between 70,000 and 75,000 dollars and maintain that level, talk of a new, sustained bull leg will remain premature. The next chapters of this story will be written where macro, sentiment, and on‑chain dynamics intersect — and that battle is only just beginning.
Disclaimer:
This article is for informational purposes only and should not be regarded as financial or investment advice. Trading, buying, or selling cryptocurrencies involves a high level of risk, and each reader should conduct their own research and carefully consider their financial situation before making any investment decisions.