Bitcoin is making a fresh charge against multi-month resistance, but BTC price action is already facing calls for a fall in CPI.
On March 14, it saw key resistance near $25,000 as markets awaited key economic data from the US.
CPI is expected to bring about a “strengthening” of Bitcoin
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD at Bitstamp’s overnight monthly high of $24,917.
The pair survived after the impact of multiple bank shutdowns in the US sent crypto markets soaring.
Now, when it comes to short-term BTC price action, all eyes are on the recently published Consumer Price Index (CPI) for February.
A classic trigger of crypto volatility in itself, last month showed an unwanted slowdown in CPI inflation; This has led to concerns that the Federal Reserve will keep interest rates on hold for longer periods of time.
However, hedge funds had little time to worry as the banking crisis overshadowed the inflation debate. On that date, expectations indicated that the Fed would abandon rate hikes altogether, regardless of CPI trends.
“Bitcoin is reaching its peak here as it tests the $25k high,” Cointelegraph contributor Michael van de Pop, founder and CEO of Trading Company Eight, told Twitter followers.
“If possible, you want to see some consolidation (CPI day today) before going ahead.” Bear if the markets move to a high of $25.2k. Move over and back, I wanted shorts up to $23k.
Supply chain monitoring input materials indicators indicate a potential upswing in the order book thanks to CPI.
He warned that if the data beat expectations, supply support could be “carpeted”, paving the way for a deeper BTC price correction.
“Asia will continue to eat up liquidity and volatility ahead of the CPI report,” he said of the BTC/USD pair’s move on Binance.
“I expect carpet support if CPI is hot. If it is cold and another bank does not fall before lunch, a big short squeeze.
Co-founder Keith Allen revealed that $23,600 and $25,000 are the main areas of supply and demand liquidity.
Material indicators added that Bitcoin would need to post multiple weekly closes above the 200-week moving average (WMA) to have a leg to the overall rally.
“Full candles above 200 WMA are needed to consider a flash,” he confirmed.
CPI: “produced” or “somewhat”?
Lower-than-expected CPI readings prompt the Fed to cut further rate hikes and ease monetary conditions.
Related: Fed Begins ‘Stealth QE’ – 5 Things to Know in Bitcoin This Week
US President Joe Biden, for his part, seemed unconcerned last week that inflation was on track even before the full-blown banking crisis.
“Next week — I’m optimistic we’ll get the CPI,” Biden said at a White House news conference.
But there were doubts among analysts. A surprise drop in the CPI would be very helpful for the Fed, which is now indirectly supported by the popular trader xTrends.
“I believe tomorrow’s CPI will be produced to prevent a market crash and will be revised quietly after a few weeks, just like the last few CPI numbers have done,” he said in part on Twitter.
A further macro warning came from Cathy Wood, chief executive of ARK Invest, who gave a gloomy forecast about the consequences of any further rate hikes.
In a dedicated Twitter thread on March 13, Wood, whose leadership ARK crypto exposure continues to increase, calls on the Fed to “stand down” on rates.
“If the Fed continues to focus on lagging indicators like the CPI and does not respond to the bearish forces telegraphed by the inverted yield curve, this crisis will cover more regional banks and will further centralize the nationalization of banking in the United States,” she wrote.