The Federal Reserve estimates that the U.S. April CPI increased by 3.56%; analysts warn: if it fails to break above the 200-day EMA, Bitcoin will drop below $70k.

Cleveland Fed’s latest nowcast shows April CPI year-over-year rising back to 3.56%, higher than March’s 3.3%.
Meanwhile, Strategy pauses coin purchases, STRC falls below face value, weakening institutional support; technically, if the ascending wedge pattern breaks downward, Bitcoin may retest the $70k level.
(Background recap: Bitcoin V-shape surge to $84,000! Shorts suffer $380 million liquidation, fear index recovers from extreme fear to neutral)
(Additional background: AI Agent also needs ID: KYA (Know Your Agent) standard battle begins, Visa, Ethereum, Trulioo race to secure positions)

Table of Contents

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• Cleveland Fed: April CPI YoY estimate 3.56%, above March’s 3.3%
• The previous two CPI releases “got hotter and rose,” but this time is different
• Technical: If the ascending wedge breaks down, target drops to $70k
• Analyst warning: $78,600 is the last line of defense for bulls

This week, Bitcoin faces a tougher test than previous CPI release days—Cleveland Fed’s latest nowcast estimates April CPI YoY will rebound to 3.56%, combined with institutional support from MicroStrategy (now renamed Strategy) pausing coin purchases, and analysts warn that if BTC loses key support, it could retest the $70k level.

Cleveland Fed: April CPI YoY estimate 3.56%, above March’s 3.3%

According to Cleveland Fed’s latest inflation nowcast model, the overall CPI YoY for April is estimated at 3.56%, significantly higher than March’s 3.3%; the monthly increase is estimated at 0.45%, lower than the previous month’s 0.9%. For core CPI, the YoY estimate is 2.56%, and the MoM is 0.21%, roughly stable compared to 2.6% and 0.2% previously.

This data presents a “mixed bag” outlook—despite slowing monthly gains and stable core prices, the rebound in the YoY rate may reinforce market expectations that the Fed will find it difficult to cut rates quickly in the short term, putting pressure on risk assets like Bitcoin.

The official April CPI report will be released on May 12.

The previous two CPI releases “got hotter and rose,” but this time is different

It’s worth noting that Bitcoin has previously strengthened counter to higher CPI figures. For example, after the March CPI report, when the overall inflation YoY jumped from 2.4% in February to 3.3%, BTC surged over 15% following the report release.

One reason behind this is that institutional buyers absorbed over 500% of the newly mined Bitcoin supply at that time, with Strategy accounting for a significant portion.

However, this support is weakening. Strategy has recently paused Bitcoin purchases, and its preferred stock STRC continues trading below face value of $100. When STRC falls below face value, the efficiency of issuing new shares to raise funds diminishes, limiting Strategy’s ability to raise new capital for subsequent Bitcoin acquisitions.

Technical: If the ascending wedge breaks down, target drops to $70,000

From a technical perspective, Bitcoin’s daily chart is forming a classic rising wedge pattern, a bearish reversal signal that often triggers a proportional decline once the price breaks below the lower trendline.

As of Sunday, BTC is approaching the wedge’s convergence point (around $84,000, also near the 200-day EMA). Analysts indicate that if the price breaks downward from this point, the target could be around $70,000.

Conversely, if BTC can hold above the convergence point and break above the 200-day EMA, a short squeeze could occur, with upside targets between $90,000 and $95,000.

Analyst warning: $78,600 is the last line of defense for bulls

Analyst Killa posted on Sunday that large traders might start reducing risk ahead of the CPI release, noting that the key support for BTC is $78,600 (the weekly opening price). If this level is broken, the next downside targets are $74,000–$75,000.

He added, “I will watch for liquidity sweeps around this pivot zone as a signal for the next move.”

At the time of writing, Bitcoin is trading at $80,694, nearly unchanged in 24 hours, as the market waits anxiously for this Tuesday’s inflation data.