Bitcoin has been mostly consolidating around recent lows as a hawkish repricing of Federal Reserve expectations — triggered by Fed Governor Waller's remarks and a hotter-than-expected US CPI reading — weighed on the cryptocurrency market. Fed policy expectations are among the most closely watched macro drivers for crypto, which trades as a risk asset and is sensitive to shifts in the projected path of interest rates.

As a reminder, Waller said he would support a rate hike in December regardless of the inflation data, and went further by raising the possibility of a larger 50 basis point move if inflation comes in hotter than expected. The subsequent US CPI report indeed came in above expectations, lifting the perceived probabilities of a 50 basis point hike. Following the release, Fed official Hammack also left the door open to a larger rate increase.

Traders are currently pricing in just a 12% probability of a 50 basis point hike, but those odds could climb further if more Fed officials endorse the possibility or refrain from pushing back against it. The distinction between a 25 and a 50 basis point step matters for how quickly policy tightens, which is why traders are tracking both the direction and the size of the expected move in the run-up to the December decision.

Meanwhile, US-Iran negotiations remain in a deadlock. The Wall Street Journal (WSJ) reported that US Vice President Vance is considering holding face-to-face talks with a senior Iranian security official in an attempt to bring the conflict to an end. However, separate reports suggested that senior Iranian officials believe Washington is preparing either further military strikes or tighter economic pressure in an attempt to provoke a response from Tehran. A significant amount of mistrust clearly remains between the two sides, reinforcing the view that a diplomatic breakthrough may not be as near as markets had expected. For traders, the standoff adds a layer of geopolitical uncertainty on top of the monetary policy picture, with any easing of tensions removing a source of risk and any escalation adding to it.

Looking ahead, per the analysis, Bitcoin will likely remain under pressure amid the negative macro backdrop, though a more dovish Fed speaker or a breakthrough in US-Iran negotiations could trigger a relief rally.

Bitcoin Technical Analysis — Daily Timeframe

On the daily chart, Bitcoin is approaching the major upward trendline. If the price gets there, buyers are expected to lean on the trendline, with defined risk positioned below it, to set up for a rally into the 98,000 level, with the downward trendline seen as the first target. Sellers, by contrast, will want to see the price break lower to increase bearish bets toward the 67,000 level next.

Bitcoin Technical Analysis — 4-Hour Timeframe

On the 4-hour chart, the price has been trading inside a small falling channel. Sellers will likely continue to lean on the top trendline, with defined risk above it, to keep targeting a break below the major upward trendline. Buyers, on the other hand, will look for a break higher to position for a correction into the major downward trendline.

Bitcoin Technical Analysis — 1-Hour Timeframe

On the 1-hour chart, there is little to add beyond the broader setup: sellers have a better risk-to-reward configuration around the upper bound of the channel, while buyers will look for a breakout or a rejection around the major upward trendline. The red lines on the chart define the average daily range for today.

Upcoming Catalysts

Today brings the latest US Jobless Claims figures, and the trading week concludes tomorrow with the release of the US PPI data. Jobless Claims offer a timely read on the labor market — a key input into Fed policy decisions — while PPI tracks inflation at the producer level, giving markets another datapoint on the price dynamics that have driven the recent hawkish repricing.