Update: After CPI prints came in at 8.5%, down from 9.1% last month, bitcoin jumped above $24,000 and regained bullish momentum.
After a four day rally, bitcoin saw a loss of nearly $1,000 between Monday and today. It was recently trading slightly above $23,200 down by more than 2 percent in the last 24 hours. Fingers could be pointed to the Wednesday morning release of July’s Consumer Price Index (CPI) numbers in the U.S, as investors wait to see the results of the report.
It hit a forty year high in June at 9.1 percent but analysts are projecting this month’s numbers to drop to 8.7 percent. So although the inflation rate is slowing down, it is still very problematic and the U.S. Federal Reserve is likely to approve a third consecutive 75 basis point interest rate hike.
Michaël van de Poppe tweeted that bitcoin is still in an upward trend and the correction is only taking place because of fears regarding the CPI numbers. If the price manages to stay above the $21,300 level then it could continue its upward trend to $24,500 with a possibility of reaching $28,000.
The global cryptocurrency market cap fell 2.7% to $1.09 trillion on Tuesday evening and bitcoin started a fresh decline from the former resistance zone near $24,250, it is currently trading slightly below $23,000 with a possibility of further losses in its future.
The price of BTC saw a movement below the $23,800 and $23,500 support levels and with the bears in control, there was a break below a major bullish trend line with support near $23,320 on the hourly chart. It is now trading below the $23,500 level and the 100 hourly simple moving average, with a consolidation above the key $22,650 support zone. Near the $23,250 level is an immediate resistance with the next major resistance at the $23,500 zone. A close above this level could see the price of BTC restart a steady upward climb.
Bitcoin’s price has remained stagnant near the $22,880 level which is also coincidentally the 20-day exponential moving average. The sloping 20-day EMA is posing a threat to day traders who will have to book small profits. However the Relative Strength Index (RSI), far from the overbought region of the 70 level, is displaying a positive sign for the bulls, although the $24,100 level has proven once again to be a difficult level for bitcoin to break above as this is its fourth attempt to clear this region. This barrier needs to be crossed for bulls to gain significant momentum. Another positive sign for the bulls is the series of higher lows that can be noticed on the 4-hourly chart.
William Clemente, Blockware lead insights analyst, pointed out in a recent Tweet how the CPI numbers have always been pivotal for bitcoin price action. Adding that these numbers would form a ‘big day’ for bitcoin and crypto. Trader and analyst Daan Crypto Trades estimated that any reading above 9.1% could result in a bearish price action.
