According to 10x Research: Bitcoin has reached its initial downside target of $55,000, appearing oversold in the short term. A countertrend rally is likely, driven by expected macroeconomic tailwinds and the potential approval of the Ethereum ETF by the SEC. However, the medium-term outlook remains cautious.Detailed Analysis:CPI Data and Bitcoin:The previously observed pattern of Bitcoin's price reacting to year-over-year CPI prints was invalidated last month. Despite a lower CPI reading of 3.3% compared to the previous month's 3.4%, Bitcoin fell from $68,000 following the CPI release on June 12.Upcoming CPI Data:The next inflation print on July 11 is anticipated to show a deceleration from 3.3% to either 3.2% or 3.1%. This period, extending until late September presents an opportunity for lower inflation figures due to favourable year-over-year comparisons. Traders should consider CPI data release dates as potentially bullish for Bitcoin, despite recent breaches of long-term technical support levels.10x Research Inflation Model:The 10x Research inflation model shows lower figures compared to the official CPI data, likely influenced by structural inflation pressures from the COVID period. This divergence gives confidence that the CPI will report a lower figure on July 11.Support for Bitcoin:Lower CPI figures should provide support for Bitcoin and other deflationary assets. Expectations for a potential Fed rate cut in September and/or December are high. Fed Chair Powell may prepare the market for this possibility during the July 31 FOMC meeting.Seasonal Trends:Bitcoin prices have tended to weaken in August and September. Any rate cut rally could push Bitcoin near $60,000, though prices may struggle to sustain above this level. The bond market is currently pricing in two rate cuts for this year, following last Friday’s disappointing employment data.Recent Declines:Bitcoin has declined by 20% over the past month, with 13% of this loss occurring during Asian trading hours. Ethereum has lost 22%, with 16% of that loss during Asian trading hours. 65% of those declines have occurred during Asian trading hours.Futures Liquidations:Over-positioning in Bitcoin and Ethereum perpetual futures has been a concern. Recent price declines below $60,000 have triggered significant futures liquidations. $3.7 billion in Ethereum futures open interest and $4.3 billion in Bitcoin futures have been liquidated since their respective peaks in May and June 2024.USDC Minting:Last week, $1 billion in USDC was minted, indicating that US institutional investors might have bought the dip. USDT minting remained negligible. The money flow indicator has recorded four consecutive weeks of net liquidity outflows, explaining the weakness in crypto markets.Liquidity Outflows:Further unwinding of perpetual futures is expected, with $9.2 billion deployed since the ETF futures launch in January. The rate of liquidity outflows should slow, reducing downward pressure on Bitcoin and Ethereum prices.Short-Term Reversal Indicators:Short-term reversal indicators are deeply negative, suggesting a potential rebound in Bitcoin before a possible second leg down. The RSI is at 33%, its lowest level since August 2023.Price Projections:As long as Bitcoin remains below $61,000, a drop to $50,000 is expected during August/September. Another upward move could occur if macro liquidity overwhelms the market. If the US economy faces a recession, Bitcoin could drop significantly lower. Bitcoin is currently oversold with two potential upside catalysts—the US CPI data and the SEC’s potential approval of the Ethereum ETF—which might trigger short-covering and a brief rally.Bitcoin is currently in a critical phase with potential short-term bullish catalysts, including the upcoming CPI data and the possible approval of the Ethereum ETF by the SEC. However, the medium-term outlook remains cautious, with potential further declines expected if macroeconomic conditions do not improve. Traders should stay vigilant and consider both technical and macroeconomic factors when making decisions.