Recent US Consumer Price Index (CPI) figures and potential global liquidity shifts could trigger substantial short covering in the Bitcoin (BTC) market, according to analysts.

On Tuesday, Bitcoin faced selling pressure, dropping over 1% and slipping below the $62,000 mark. This decline was linked to concerns over US macroeconomic data, leading to the liquidation of more than $100 million worth of Bitcoin long positions within the past 24 hours.

Anticipated Short Covering in Bitcoin

Insights from HODL15Capital highlighted ongoing trends in Bitcoin on-chain activity, revealing a consistent selling pattern among holders of less than 1 BTC. However, a significant shift was noted as holders with 100 or more BTC showed a rare net negative activity, potentially indicating hedge funds shorting Bitcoin in anticipation of unfavorable CPI numbers.

Market focus is now on the upcoming US CPI report, with senior market analyst Kyle Rodda emphasizing its impact on market sentiment. While a positive report could alleviate inflation concerns, a substantial downside surprise might be needed to address fears of persistent inflation.

Bullish Predictions and Global Liquidity

Bitcoin analyst Willy Woo has identified a bullish trend in global liquidity, likening it to an ascending triangle formation. Woo forecasts a breakout from this pattern before October 2024, signaling a potentially bullish trajectory for BTC. His analysis suggests that Bitcoin could see historic developments leading up to 2025.

Bitcoin Network and Whale Activity

At the current trading price of $61,915 and a market cap of $1.2 trillion, Bitcoin's network activity is showing a decline, accompanied by reduced whale activity in large transactions. Insights from Santiment indicate that issues like platform outages and withdrawal freezes, particularly on exchanges like Coinbase, are contributing to this sentiment. Despite the current market uncertainty, Santiment reports suggest that this FUD (Fear, Uncertainty, Doubt) could pave the way for a rebound in the near future.