Bitcoin holds above $60,000 as traders search for a clear direction

Bitcoin has entered a fresh downward move below the $62,500 zone, with negative technical signals suggesting the price could face further losses if it falls beneath the $61,200 level.

Rate hike concerns

Although the US Consumer Price Index rose 4.2% in the 12 months through May, marking the highest annual inflation rate since April 2023, economists still see limited prospects for further monetary tightening.

Core inflation, which excludes food and energy prices, increased 0.2% during the month after rising 0.4% in April, boosting hopes that inflationary pressures stemming from the energy price shock can be contained.

James Knightley, chief international economist at ING, said labor costs remain the biggest burden on US businesses, and with wage growth continuing to slow, this could help ease pressure on core inflation.

"All of this should help keep inflation expectations under control. Therefore, while we no longer expect the Fed to cut interest rates this year due to stronger economic momentum, we also do not expect a rate hike," he said.

Markets are currently pricing in a full 25-basis-point rate increase in December, a significant shift from earlier expectations that had pointed to two rate cuts this year before the outbreak of the Iran conflict at the end of February.

Bitcoin retreats toward support levels

Bitcoin failed to hold above the $63,500 support area, remaining within a bearish trading range and extending its losses below the $63,200 level before also breaking beneath $62,500.

The cryptocurrency fell below $61,200 and reached a low of $60,746, while technical indicators continue to reflect persistent selling pressure.

Bitcoin posted a limited rebound above the 23.6% Fibonacci retracement level of the decline from the $64,613 high to the $60,746 low.

The cryptocurrency is currently trading below the $62,500 level and beneath the 100-hour simple moving average. A bearish trend line has also formed, with resistance emerging near $62,400 on the hourly BTC/USD chart.