Market optimism surges as Bitcoin steadily climbs and inflation indicators show promising results.
Bitcoin (BTC), the leading cryptocurrency, has managed to maintain its position above the $30,000 mark, with investors hopeful for a brighter future. This optimism is fueled by recent data indicating a marginal decline in the United States inflation indicator, the Consumer Price Index (CPI).
Bitcoin price increased 1.1%, reaching $30,363, following the release of the CPI data. It revealed that inflation in June had fallen to its lowest level in over two years. Goods and services experienced a 0.2% increase month-over-month, while the CPI results surpassed the Dow Jones.
The CPI rose 3% from the previous year, marking the lowest it has gone since March 2021—and a drop from 4% a month ago.
Bitcoin Holds Firm As CPI Exceeds Expectations, Fed’s Response Uncertain
These CPI results will be used by the Federal Reserve, along with other economic indicators, to make decisions regarding interest rates. The Fed had previously paused interest rate hikes in June but hinted that further increases might be necessary later in the year, depending on the state of the economy.
Although the CPI data exceeded expectations, the reaction of the Federal Reserve remains uncertain. Some officials have supported a 25 basis points increase, while others are more cautious.
While investors may not be entirely motivated by the CPI figures due to the Fed’s earlier hawkishness, projections of a Bitcoin price surge to $120,000 by the end of 2024 have emerged.
Recently, Bitcoin’s price has managed to sustain its position above $30,000. Network data reveals that investors are steadfast in their commitment to hold onto their wallets. Strahinja Savic, the head of data and analytics at FRNT Financial, highlights that the idle Bitcoin supply has reached an all-time high, nearing 70% over the past two years.
“This data suggests that the dominant bitcoin investor right now is the long-term ‘holder,’” Savic stated in a written statement to CoinDesk. “This cohort is less likely to be sensitive to macro considerations.”
Insights from Santiment, a renowned analytics platform, indicate that large-scale investors, known as whales and sharks, are closely monitoring Bitcoin’s price range between $30,000 and $31,000, much like the rest of the traders.
Interestingly, these significant investors are acquiring stablecoins such as USDP and DAI at a rapid pace. This uptake of stablecoins suggests the possibility of future substantial crypto purchases and increases the likelihood of price pumps.
Analyzing the four-hour chart, the 100-day Exponential Moving Average (EMA) emphasizes Bitcoin’s position above $30,000. Additionally, the Bollinger Bands indicate a potential breakout soon.
The Bollinger Bands contract signifies a market consolidation characterized by sideways price movement and low volatility. Traders can use these bands to identify breakout patterns or reversals, such as squeezes, double tops or bottoms, and candlestick formations.
Should Bitcoin successfully maintain its support, a bullish breakout to $35,000 and potentially $38,000 may be on the horizon. This surge would be fueled by the increasing demand for BTC and the willingness of investors to HODL (hold their assets).
Traders must closely monitor the immediate support levels at $31,000 and the subsequent seller congestion at $32,000. Conversely, a failure to sustain support at $30,000 could trigger a sell-off, potentially leading to price drops at $28,000 and $25,000, respectively.