Bitcoin Dips Below $108K as Rate Cut Hopes Fade

Bitcoin (BTC) is under pressure, dropping 1.7% in the past 24 hours to trade around $107,728. The pullback comes as macroeconomic headwinds—particularly around U.S. interest rates—intensify.

Bitcoin Price Slips Below $108K Amid Cooling Inflation Data

Bitcoin's recent downturn was triggered during the U.S. trading hours on June 11, after the release of softer-than-expected Consumer Price Index (CPI) data. Headline CPI slowed to 2.4% year-over-year, slightly below the projected 2.5%, while core CPI landed at 2.8%, also below the 2.9% forecast.

BTC/USD daily chart. Source: TradingView

While the decline in inflation might seem bullish for risk assets like Bitcoin, it had a paradoxical effect on markets: it reduced expectations for immediate Federal Reserve rate cuts.

"Even as overall inflation is cooling, essentials remain expensive. Americans are frustrated," noted The Kobeissi Letter in a recent post on X.

As a result, the U.S. Dollar Index (DXY) fell to a multi-month low of 98.5. But paradoxically, markets now almost unanimously (99.8% odds via the CME FedWatch tool) expect the Fed to hold interest rates steady at the June 18 FOMC meeting.

Eyes on PPI Data: What’s Next for BTC?

Investor focus has now shifted to the upcoming Producer Price Index (PPI) data scheduled for release on June 12. Analysts expect a modest rise of 0.2% month-over-month, with core PPI estimated at 0.3%. Any surprise to the upside could further dampen Bitcoin sentiment and add selling pressure across the crypto market.

Target rate possibilities for June 18 FOMC meeting. Source: FedWatch tool

Technicals: BTC Faces Strong Resistance Below $112K

Bitcoin is currently battling a critical resistance zone between $108,800 and $112,000, which includes supply overhead from previous market peaks. This range has capped bullish momentum multiple times and is proving difficult to overcome.

At the same time, BTC is testing support at $106,000, which coincides with the upper boundary of a bull flag formation visible on the daily chart. This pattern typically signals continuation, but it must hold above the trendline to remain valid.

• The Relative Strength Index (RSI) has declined from 64 to 56 over the past few sessions, showing waning bullish strength.

• A break below $106,000 could invalidate the bull flag, opening the door for deeper correction, potentially toward $100,000.

Expert Insight: Correction or Trend Reversal?

Analyst Michael van de Poppe, founder of MN Capital, suggested that BTC’s failure to hold above $110,000 isn't necessarily alarming—unless the $106K level is breached.

“Bitcoin couldn’t break through the $110,000 area and therefore, we should have some correction,” van de Poppe said. “As long as Bitcoin stays above $106,000, then there's nothing to worry about.”

Source: AlphaBTC

Summary: Macro Pressure Tempers Bitcoin Rally

Despite long-term bullish fundamentals, Bitcoin's price is cooling off due to a combination of macroeconomic uncertainty, shifting interest rate expectations, and technical resistance near its all-time highs. With markets pricing out a June rate cut and the next major macro trigger being the June 12 PPI report, traders are watching closely for BTC's next move.

BTC/USD four-hour chart. Source: Michael van de Poppe

Key Takeaways:

• BTC drops 1.7%, trading below $108,000 amid Fed rate cut doubts.

• CPI data came in cooler than expected, but it didn't revive cut hopes.

• June 18 Fed meeting now expected to hold rates steady.

• Technical support at $106,000 is crucial; a breakdown could test $100K.

• Upcoming PPI data could shape near-term market direction.