Bitcoin maintains its position above the key support level of $30,000, while market observers eagerly anticipate the release of the US Consumer Price Index (CPI).
The CPI, a highly regarded gauge of inflation, will play a crucial role in shaping the Federal Reserve’s future decisions on interest rates, following their decision to halt rate hikes in early June.
Amidst this backdrop, experts are divided on how Bitcoin’s price will respond to the forthcoming CPI data, slated for release on Wednesday. Market expectations suggest a 3% range, which could potentially signal a further easing of inflation in the United States, potentially leading to a continued pause in interest rate hikes.
Assets with risk exposure, such as Bitcoin, tend to benefit from declining inflation rates, as they attract investors seeking alternative avenues for their capital. Consequently, if inflation eases as anticipated, it could encourage increased investment in Bitcoin, cryptocurrencies, and traditional stocks. However, the $30,000 support level puts Bitcoin in a precarious position, leaving room for potential declines to $28,000 and $25,000.
Bitcoin Accumulation Surge Sparks Bull Market Potential
The recent surge in Bitcoin accumulation suggests that the digital asset could still be primed for an upward movement. As more investors acquire BTC, it strengthens the case for a potential bull market.
Analyzing Bitcoin’s price dynamics at a micro level, we observe that it is currently trading within a bullish rectangle pattern. This pattern suggests a temporary pause in the upward trend, allowing for consolidation before the next significant breakout.
To validate the breakout, traders are closely watching for a breach of the rectangle resistance, set at $31,374. Confirmation of the breakout would entail a sudden surge in trading volume and sustained movements above the resistance level. Traders who have established long positions in BTC anticipate a potential 5% surge, with a breakout target at $33,000.
The credibility of the anticipated breakout to $33,000 is further bolstered by the presence of a bullish signal from the Money Flow Index (MFI). Despite a temporary drop from the overbought region above 80 to 35, the MFI is climbing once again. This indicator reveals the strength of the inflow and outflow of money in Bitcoin markets.
Looking ahead, Tim Frost, CEO of Yield App, a digital wealth management platform, predicts that the next bull market will likely emerge in 2024 following a year of continued consolidation and significant innovation in the crypto space. Glassnode, an on-chain analytics platform, supports this outlook, highlighting the remarkably shallow peak drawdown of -18% in 2023 compared to previous cycles. The platform attributes this resilience to the strong underlying demand for Bitcoin.
Crypto analyst JD, with a significant following on Twitter, echoes these sentiments and suggests that a confirmation of the BTC bull market is imminent. He anticipates the signal to emerge within the next month, marked by a confirmed bullish cross on the MACD and the stochastic RSI crossing above the 80 level. If this confirmation materializes, it could potentially trigger a season of growth for alternative cryptocurrencies, known as altcoins.
While the support at $30,000 remains critical for Bitcoin’s price stability, there is a possibility of an initial spike to $33,000. However, should the immediate support level be breached, Bitcoin may experience losses, potentially dropping to $28,000 before another bullish breakout takes place.