Bitcoin and the entire cryptocurrency market are bracing themselves for a significant blow in the near future, according to prominent crypto journalist and blogger Colin Wu. Wu predicts that the upcoming release of the US Consumer Price Index (CPI) within the next 12 hours, coupled with the looming Binance court hearing, will have a sharp impact on the crypto market.
Experts are anticipating a decline in the retail inflation index, with expectations that it will drop to 4.1%. Such a development could have a short-term effect on the price of Bitcoin, as witnessed in previous CPI reports throughout the year. Inflation rates, which soared to 9% a year ago, subsided to 5% in March.
The analyst also emphasized that the upcoming Binance court hearing is causing heightened concern within the crypto community, as these events are likely to ripple across the entire cryptocurrency market. The convergence of these two significant events has pushed the daily option Implied Volatility (IV) to 50%, a significant increase from its level of less than 30% just a week ago. Typically, IV tends to rise during bearish markets. Additionally, the forthcoming CPI report will shed light on whether the Federal Reserve will maintain its rate-hiking policy.
The aforementioned Twitter account also disclosed that an unidentified whale has made a substantial purchase of nearly 5,000 out-of-the-money (OTM) daily call options on Bitcoin. This bullish move accounts for approximately 40% of the total daily volume, indicating strong long-term sentiment from this particular market participant.
Bitcoin Makes A Gradual Recovery
Following the news of the Securities and Exchange Commission (SEC) filing charges against Binance and Coinbase, Bitcoin experienced a sharp drop of nearly 4% on Saturday. However, according to on-chain data aggregator Santiment, the subsequent “mass hysteria” surrounding these events has subsided. Santiment analysts now anticipate a recovery in the cryptocurrency market, at least until further developments related to the lawsuits unfold. Bitcoin, the leading cryptocurrency, has already regained 2.71% of its value since the fall and is currently trading at $26,202 on the Bitstamp exchange.
As the crypto market awaits the release of the CPI report and the impending Binance court hearing, uncertainty looms over its future trajectory. Traders and investors will closely monitor these events for their potential impact on Bitcoin and the wider cryptocurrency landscape.