Bitcoin (BTC) reached multi-day lows on August 10 as cryptocurrency traders prepare to take a hit with fresh inflation data in the US.
BTC/USD 1-hour candlestick chart (Bitstamp). Source: TradingView
Trader: Market ‘could get ugly’ if CPI continues to rise
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD dropping to $22,668 on Bitstamp in the latest daily close – its lowest level since August 5.
The bullish momentum evaporated during the previous day, and the mood among traders was off risk as markets waited for the latest CPI reading.
Covering July, the data was due at 8.30am ET on August 10, with forecasts calling to show that US inflation has already peaked.
“The CPI publications have been a worry for BTC price action,” William Clemente, Lead Insight Analyst for Blockware, wrote in a tweet about the event, adding that the CPI will mark an “important day” for cryptocurrencies.
The accompanying chart shows the impact of previous CPI readings on BTC/USD.
Annotated BTC/USD chart showing CPI events. Source: William Clemente / Twitter
Meanwhile, trader and analyst Daan Crypto Trades gave a CPI reading of 9.1 or higher as “bearish” for price action against the current forecast of 8.7.
“The market was pumping on the idea that inflation probably peaked last month,” he wrote in a dedicated thread.
“If you don’t get that confirmation today, I think it could be an ugly short-term as the peak is likely to be moved forward another 1-2 months. Which would likely mean a delay in the Fed rollover as well.”
Meanwhile, macro analyst Alex Krueger was more dismissive, calling the CPI a “small number” while acknowledging its impact on risky asset trends.
Bitcoin price remains far from bullish pivot zone
Thus BTC price action remained confined to a familiar range with classic support and resistance levels still in play.
Related: Bitcoin Dominance Reaches 6-Month Low as Barometer Announces New ‘Alternate Season’
BTC/USD is hovering around $23,000 at the time of writing, after dropping over $1,000 the day before.
Daan Crypto Trades has identified $24,300 as a critical level for a breakout and stabilizing Bitcoin to “fly,” with $21,000 as a potential target in the event of a crash.