The Bitcoin futures market is currently experiencing a notable cooling period as whale activity diminishes and retail investors gain prominence, contributing to a bearish outlook ahead of critical upcoming inflation data. Analysts are closely monitoring the Consumer Price Index (CPI) and Producer Price Index (PPI) reports set to be released on Wednesday and Thursday, with many projecting that Bitcoin (BTC) may aim for a retest around the $105K mark.
This week is pivotal for the market, highlighted by significant economic indicators. The U.S. Non-Farm Payrolls Annual Revisions scheduled for Tuesday, followed by the PPI on Wednesday and the CPI alongside the European Central Bank (ECB) rate decision on Thursday, are anticipated to stir volatility among investors.
The PPI measures inflation trends at the producer level, while the CPI reflects consumer-level inflation. Together, these metrics can influence expectations regarding Federal Reserve monetary policy. Recent inflation data has raised concerns among investors; for instance, in August, the PPI increased year-on-year by 3.7%, exceeding the expected 3.0%, and the CPI rose by 3.3% versus the forecasted 2.5%. These unexpectedly high figures elicited a market recalibration, resulting in a 2% decline in various risk assets, including Bitcoin, as traders adjusted their expectations for aggressive rate cuts by the Fed.
Looking ahead, analysts expect a slight cooling in upcoming CPI readings, attributed to declining shelter and energy costs, with projections estimating it may approach 3.0% year-on-year. The PPI is also anticipated to moderate due to easing supply chain pressures, although energy price fluctuations continue to pose risks. A more favorable inflation print could be seen as bullish for Bitcoin, potentially prompting the Fed to consider rate cuts later in September or during Q4 2025. Conversely, a higher-than-expected inflation reading could trigger a decline in market sentiment toward Bitcoin, bringing about short-term selling pressures.
Data from CryptoQuant indicates that Bitcoin’s price has been operating within a narrow range of $108K to $113K in recent months amid notable institutional accumulation. However, further investigation into market dynamics reveals weakness in the futures market, which significantly influences Bitcoin’s price movements. Notably, there has been a decrease in activity among futures market whales, as illustrated by a decline in the Average Order Size—calculated by dividing total trading volume by the number of trades—which indicates a shift toward smaller, retail-driven transactions.
Moreover, the Futures Volume Bubble Map presents a bearish outlook, illustrating reduced trading activity in the futures market. The Bitcoin Futures Taker Cumulative Volume Delta (CVD) indicates that sellers are exerting stronger pressure, reinforcing the bearish sentiment that futures market participants foresee a downward movement in Bitcoin’s price.
In the last 12 hours, Bitcoin futures outflows have surpassed $8.55 billion, revealing a significant net inflow change of over -130%, signaling that investors are adopting a more cautious approach. Bitcoin spot inflows echo this trend with a substantial -346% net inflow change over the last eight hours.
Technical analysis by DaanCrypto suggests that the $103K to $105K range could serve as a bearish retest support level, with potential fluctuations in Bitcoin’s value influenced by inflation data this week. Following a rejection at the $112K level, the price appears to be in a consolidation phase. DaanCrypto posits that the market may regain strength if BTC maintains above $115K or experiences a monthly low that allows for a reattempt at $107K to $112K.
The current Bitcoin price action indicates indecision, with expectations that a sweep of monthly lows could incite panic and fears of falling below the $100K mark. However, optimal support at the $103K to $105K zone could stabilize the cryptocurrency, serving as a launchpad for potential rallies as the market approaches October and November, with aspirations of achieving new all-time highs above $130K.
On a technical front, the Bitcoin 4-hour chart reveals persistent rejections from the volume-weighted average price (VWAP) line, which has emerged as a significant dynamic resistance. The most recent efforts to reclaim the VWAP near $113,000 were unsuccessful, leading to renewed consolidation. While volume spikes do occasionally suggest buyer interest, the inability to maintain momentum above this resistance indicates that sellers retain control in the current market landscape. Without a robust breakout and sustained volume above the VWAP, Bitcoin risks drifting lower toward its next support level around $104,600. Presently, market structure appears bearish to neutral, with any potential upside largely reliant on a decisive recovery above the VWAP.
