Bitcoin (BTC) is experiencing strong headwinds as it makes a valiant attempt to rise above the $85,000 ceiling. The digital asset faced rejection at this level on Tuesday, causing a 1.12% drop. Bitcoin continues to encounter strong resistance at the 200-day Exponential Moving Average (EMA). Recent outflows from US spot Bitcoin ETFs and hawkish comments from the Federal Reserve are making it even harder to predict which way its price will break.

In spite of these challenges, Bitcoin has found a footing and settled around $84,000 as of Thursday. Trailing indicators point to a potential period of consolidation. The flattening Relative Strength Index (RSI) indicates trader indecision and the potential for a period of price consolidation. The market is closely watching for a decisive move above $85,000, which could pave the way for a rally towards higher price targets.

Technical Hurdles and ETF Flows

Since last year, Bitcoin’s price action has been ruled almost exclusively by its 200-day EMA – currently at the level of $85,000. As illustrated by the rejection BTC has seen at this level since Saturday, it is quite a strong resistance level. Resolving this technical hurdle would be important for Bitcoin to have any new upward momentum endure.

It hasn’t all been bad—here’s what recent data shows behind the push for US spot Bitcoin ETFs. On Wednesday—following the announcement of the first oil production cut—these ETFs saw a net outflow of $169.87 million, showing a complete 180 in investor sentiment. Throughout the week, bullish investors returned to a Bitcoin-focused speculative party. The next day, they continued to see net inflow, ending the two-day period with a new inflow record of $77.42 million.

Institutional flows have continued to show signs of weakening throughout this week, further contributing to the generally cautious tone in the market. Beyond the technical resistance and volatile investment flows lies another challenging factor for Bitcoin. Consequently, it continues to have a hard time breaking out convincingly.

Macroeconomic Factors Weighing on Bitcoin

It is worth acknowledging that the broader macroeconomic landscape is playing a big part in Bitcoin’s price dynamics. In that context, Fed Chair Jerome Powell’s recent hawkish hootings come as a surprise. This all but rules out the possibility of the US central bank cutting interest rates in the near term. Fears of inflationary pressures underlie this position. These concerns come on the heels of an increase in the implementation of tariffs by the aggressive tariff policy of US President Donald Trump.

The US Census Bureau, slightly harder to believe, simply came out with March Retail Sales up 1.4%. That’s the highest increase we’ve had in more than two years! Of course, the robust economic data makes further interest rate cuts in the near term less likely. Consequently, it throws cold water on market sentiment for riskier assets, including Bitcoin.

These macroeconomic factors are creating a risk-off environment, making it more difficult for Bitcoin to attract new investment and sustain upward momentum. Investors are understandably focused on these developments, which could play a monumental role in determining Bitcoin’s price direction moving forward through the next several weeks.

Potential Scenarios and Price Targets

With Bitcoin currently sitting around $84,000 USD, the entire crypto market is closely watching major technical levels for any directional breakout. The RSI on the daily chart remains stuck at its neutral level of 50. This flatness is indicative of no clear direction or momentum in the market. If Bitcoin’s bullish momentum is to be maintained, the RSI needs to push convincingly above this neutral threshold.

If BTC moves above $85,000 on a closing day-by-day basis, hey now! Perhaps more importantly, this would indicate a bullish breakout and send the rally soaring toward the all-important psychological area of $90,000. A sustained close above this resistance zone could see Bitcoin continue its forceful advance to test its March 2 peak of $95,000.

A lack of ability to break decisively above the $85,000 barrier might raise chances for additional consolidation from here, or even a possible bearish pullback. For now, traders should be watching the price action and various technical indicators to determine what the most likely scenario is.