Bitcoin's recent weekend rally faced a setback as traders took profits ahead of the upcoming U.S. Consumer Price Index (CPI) report. This dip has been characterized by significant profit-booking, leading to a notable decrease in open interest and cumulative volumes. Analysts indicate that traders are hedging against potential price declines with put options. The recent $95,000 and $100,000 puts represent a considerable portion of Bitcoin options, highlighting cautious sentiment among traders. The anticipation surrounding the CPI report adds to the uncertainty, with expectations that a hotter than expected inflation rate could adversely affect Bitcoin's momentum and even stall ongoing rallies. Historically, a softer CPI reading would favor a more dovish stance from the Federal Reserve, potentially boosting risk appetite in the crypto market. The current environment suggests that traders are preparing for both potential upside and downside risks, with profit-taking evident ahead of critical economic data releases as the market navigates through fluctuating investor sentiment and macroeconomic pressures.

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