Bitcoin holds above $62K: is a major breakout about to begin?

Bitcoin is hovering above $62,000 on Tuesday as investors avoid taking aggressive positions ahead of a week packed with major macroeconomic events that could shape the outlook for both traditional and digital asset markets.

Market participants are closely watching upcoming US inflation data, Federal Reserve commentary, and the start of the second-quarter corporate earnings season for fresh direction.

US CPI report and Fed testimony in focus

Analysts believe Tuesday's US Consumer Price Index (CPI) report could serve as the week's biggest market catalyst.

A lower-than-expected inflation reading would likely strengthen expectations that the Federal Reserve could begin easing monetary policy later this year, supporting risk assets such as cryptocurrencies. 

Conversely, stronger inflation could reinforce the case for keeping interest rates elevated for longer, weighing on investor sentiment.

Investors are also awaiting Federal Reserve Chair Kevin Warsh's two-day testimony before Congress, where lawmakers are expected to question the central bank's approach to inflation, monetary policy, and institutional independence.

According to analysts, the combination of inflation data and the Fed chair's remarks is expected to provide greater clarity on the direction of US monetary policy and broader financial markets.

Beyond macroeconomic developments, investors are preparing for the start of the second-quarter earnings season.

Major US banks are scheduled to report earnings first, followed by technology and financial companies later in the reporting cycle.

If inflation data and earnings reports support the bullish outlook, improving risk appetite could extend beyond equities and benefit cryptocurrencies that have underperformed broader stock markets in recent months.

Blockchain analytics firm Glassnode offered a more cautious assessment of Bitcoin's recent price recovery.

According to the firm, spot trading volume has declined by 21.5%, while the spot cumulative volume delta has turned negative, indicating that recent gains have not been backed by strong buying activity in the spot market.

Despite the cautious trading environment, institutional demand appears to be improving.

Glassnode reported that US spot Bitcoin exchange-traded funds (ETFs) have recorded renewed weekly net inflows after experiencing recent outflows.

The recovery in ETF inflows suggests growing confidence among traditional finance investors and provides a positive signal for overall market liquidity.

Bitcoin bulls target the $64,000 resistance level

The BTC/USD 4-hour chart remains bullish and efficient as bulls hold the support level around $62,000.

At press time, Bitcoin is trading around $62,300. The technical indicators suggest a mixed market performance.

The RSI of 48 shows that the pair is approaching the neutral 50, with fading selling pressure on display. 

The MACD lines remain within the negative territory but could cross over into the positive zone to signify a bullish reversal. 

If the bulls regain control, Bitcoin could retest the first major resistance level at $64,000 in the near term.

A daily candle close above this level could pave the way for Bitcoin to reclaim the $67,181 June high.

However, if the bearish trend persists, Bitcoin could lose the $62,000 support and retest the $60,000 psychological level over the next few hours or days.