Chart warns caution as Bitcoin longs may trigger plunge to $28,000.
Chart warns caution as Bitcoin longs may trigger plunge to $28,000.
The Blockchain Industry: A Rollercoaster Ride for Bitcoin
After a week of relatively stagnant movement, the Bitcoin price is finally seeing some action. Bulls are pushing for the most immediate critical resistance, driven by increasing uncertainty in the macroeconomic landscape. While this spike in price action has provided optimism for some operators, it’s important to approach the situation with caution.
As of now, Bitcoin is trading at $29,700, with sideways movement in the last 24 hours and a 2% profit over the past week. Other cryptocurrencies in the top 10 are experiencing similar price action, but Solana stands out with a 6% profit on similar timeframes.
US Consumer Price Index Data and the Bitcoin Price
The focus of attention in the coming days is the US Consumer Price Index (CPI) data, which serves as a proxy for measuring inflation in the country’s fiat currency. A recent report highlights positive expectations for this event, as most investors anticipate inflation to continue its decline. The potential for a lower CPI figure might enable the Federal Reserve (Fed) to slow down its interest rate hike program, potentially providing Bitcoin with some breathing room to break and flip $30,000 into support. However, it’s worth noting that any surprises in the CPI data could trigger the opposite effect.
It’s important to recognize the potential impact of market liquidity on Bitcoin’s price movement. Data from crypto analyst firm The King Fisher shows a concentration of long liquidity sitting between the $27,000 to $29,000 levels. This liquidity acts as a magnet, erasing Bitcoin’s gains and pushing it into support. The chart below visually depicts this concentration of long liquidity:
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On the flip side, positive CPI data might have little to no impact on Bitcoin’s price, allowing it to continue moving within its current range. The bulls remain determined to regain control over the 50-day moving average (MA), which is a key metric used by technical analysts to evaluate price trends. While bullish momentum may weaken, there is still a high possibility of a push into the range of $30,200 to $30,000. Keith Alan, an analyst from Material Indicators, shares his perspective:
“That doesn’t mean we can’t see a push to the $30.2k – $30.5k range today. In fact, I think there’s a good chance we could see that, and if we do, I’ll take some more profit on my scalp. What I’m watching for is where we close today and where bid liquidity comes in as local support.”
A Rollercoaster Ride for Bitcoin
The blockchain industry is well-aware of the volatility associated with Bitcoin and other cryptocurrencies. The market is akin to a rollercoaster ride, with shifts in price influenced by various factors. In this case, the focus is on macroeconomic indicators and market liquidity, which are tied to Bitcoin’s price action.
It is crucial for investors and operators in the blockchain industry to monitor ongoing developments, such as the CPI data release, to assess the potential impact on Bitcoin’s price movement. While the reports and forecasts can provide valuable insights, the market has a history of surprising investors. As market participants navigate the twists and turns of the blockchain industry, it is essential to remain cautious and exercise sound judgement.
In conclusion, the blockchain industry, particularly the Bitcoin market, is experiencing a period of increased uncertainty. The upcoming CPI data release in the US has the potential to influence Bitcoin’s price movement, but the outcome remains uncertain. It is important to carefully evaluate market liquidity and technical indicators while keeping an eye on external factors that may contribute to volatility. As the blockchain industry continues to evolve, it is essential for participants to navigate its twists and turns with a thoughtful and informed approach.
Cover image from Unsplash, chart from Tradingview
