Bitcoin Eyes Key Levels as CPI Data Looms: Liquidity Trap Forms at $109K–$111K with Resistance at $113.8K–$116K

Bitcoin was trading near $110,500 as markets braced for the first inflation update after the government shutdown. The forthcoming CPI is expected to exceed 3%, a test for the Fed‘s policy trajectory and risk appetite.

Coinglass settlement data shows a tight overlap of long and short bets in the $109k–$111.6k range, signaling a near-term liquidity trap. The $113.8k and $116k zones could trap longs if CPI surprises higher; cooler inflation could lift bids toward $107k and $104k.

Technically, Bitcoin’s daily chart shows a pullback from the roughly $126k high and a failure to reclaim the 0.5 Fibonacci level near $113.9k. The asset remains within the 0.382–0.236 retracement range as traders await a macro catalyst.

Analysts note heightened sensitivity to inflation data and policy signals, with leverage retreating as participants favor liquidity preservation over bets. The near-term trend will hinge on post-CPI fund flows and shifts in U.S. Treasuries.