As a seasoned researcher with years of experience tracking the cryptocurrency market, I have learned to anticipate the unexpected and adapt my strategies accordingly. The recent correction in Bitcoin’s price following the release of US CPI data is no exception.
The prediction for Bitcoin‘s price indicated a persistent decrease after the publication of the US Consumer Price Index data on Wednesday, resulting in a 4% drop that placed Bitcoin at $58,730 before the American trading session. The leading cryptocurrencies like Ethereum, Solana, and Ripple experienced similar declines with reductions of 4%, 3.1%, and 1.6%, respectively, suggesting a challenging market environment.
Bitcoin May Slide To $54,000 As OI Plunges
Bitcoin’s price surged beyond $61,000 and came near the resistance level of $62,000 just before the release of the Consumer Price Index (CPI) data. As per the Bureau of Labor Statistics (BLS), inflation eased to a yearly rate of 2.9%, while the Core CPI remained constant at 3.2%. In simpler terms, the price of Bitcoin increased significantly towards $62,000 before the announcement of the CPI data, and the BLS reported that annual inflation decreased to 2.9% with a stable Core CPI at 3.2%.
According to recent economic data analysis, there’s a strong possibility that the Federal Reserve will lower interest rates by approximately 0.25% in September. Such an action might alleviate tension for riskier investments, such as Bitcoin.
Despite expectations of a rate cut, the Bitcoin price was not immune to selling pressure following the news report, causing it to briefly fall below $60,000. Looking back at previous predictions, it seems that the Consumer Price Index (CPI) report is usually linked with high volatility, suggesting that another potential drop to around $54,000 may occur before a stronger upward trend sets in.
As an analyst, I noticed a significant decrease of 5% in the open interest (OI) for Bitcoin (BTC) futures on the CME, bringing it down to $8.36 billion. This reduction could potentially indicate a forthcoming price decrease. The current market sentiment among traders appears hesitant about a reversal, with only a small number of them choosing to maintain their positions open. In the past, I’ve observed that Bitcoin tends to decline when there’s a reduction in CME futures OI.
The price of Bitcoin remains above a significant support level, as outlined by IntoTheBlock’s IOMAP model, between approximately $54,955 and $56,695. This range represents about 874,500 addresses that collectively own 585,780 Bitcoins. Should this demand materialize, Bitcoin could potentially rise toward the $70,000 mark.
In this particular range, from $63,728 to $65,468, a significant number of 1.61 million addresses collectively purchased approximately 944,510 Bitcoins, making it the key area of focus.
To challenge the bearish view and allow for a new bull run towards all-time highs and beyond, a breakthrough in this area is essential. The Bitcoin price forecast indicates potential obstacles for BTC between $58,000 and $64,000 if the current supply zone remains strong.
Bitcoin Price Prediction: Downside Risks Hold BTC Back
The price of Bitcoin swiftly regained its $58,000 backing but found it challenging to maintain the upward momentum towards $60,000. However, the Relative Strength Index (RSI) is pulling back into a neutral area, which could lead to a further dip in price down to around $54,000 as suggested by the forecast.
According to the daily price data, whether Bitcoin will continue its upward momentum towards $60,000 or experience a temporary drop to around $54,000 first depends on whether it can hold at the support level of $57,000. However, if the bulls successfully flip the 200-day moving average resistance at approximately $59,454 into support, the chances of a subsequent rise above $60,000 significantly increase, potentially reducing the risk of further downtrend.
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2024-08-15 16:49