The Fed Expects Inflation to Heat Up in April, with BTC Facing the Risk of Falling to $70,000

May 10 — Bitcoin could face weaker support next week as the U.S. releases its inflation report, raising the risk of a pullback to $70,000. The Cleveland Fed’s latest real-time inflation forecast projects April’s year-over-year CPI will rise to 3.56% — up from March’s 3.3% — while the monthly CPI is seen at 0.45% (down from 0.9%). Core CPI is forecast to hit 2.56% year-over-year and 0.21% month-over-month, compared to prior readings of 2.6% and 0.2%. The official April CPI report drops May 12. This keeps the inflation picture messy: while monthly inflation slowed and core inflation held steady, overall CPI is still expected to reaccelerate — not a great environment for risk assets. A stronger annual CPI reading could reinforce the Fed’s reluctance to cut rates quickly, often weighing on speculative trades like Bitcoin. But Bitcoin has dodged deeper retracements after hot CPI prints before: after March’s CPI showed overall inflation jumping from 2.4% in February to 3.3%, BTC rose more than 15%. One reason? Institutional buyers absorbed volume equal to over 500% of newly mined Bitcoin supply, with Strategy leading the way. That support now looks weaker: Strategy has paused BTC purchases, and its STRC preferred shares are still trading below their $100 face value. When STRC trades below face value, issuing new shares becomes less efficient, limiting Strategy’s ability to raise fresh capital for more Bitcoin buys. Analyst Killa notes big investors may start cutting risk exposure around the inflation report, pointing to a similar cautious pattern ahead of 2025 CPI events. “The key support level is the weekly open at $78,600,” he said. “If that breaks, the next downside targets are $74,000 to $75,000.” Technically, Bitcoin is forming a classic rising wedge on the daily chart — a pattern seen as a bearish reversal signal. As of Sunday, BTC is climbing toward the wedge’s apex (around $84,000), where two trendlines converge. A break below this level could trigger a drop to ~$70,000 — the wedge’s measured downside target. Conversely, a breakout above the apex (which aligns with the 200-day EMA) would fully invalidate the bearish structure, with next upside targets in the $90,000 to $95,000 range.