Bitcoin had a shaky day in the market after the release of the CPI data. While expectations for inflation rates were high, it will come out below the actual number and the crypto market has responded to the news negatively. Bitcoin dropped below $19,000 as the market bled, but there was a turn around at the end of the trading day. The question now remains whether the digital asset will be able to retain these gains.
Can Bitcoin keep up?
Over the past 24 hours, the price of Bitcoin has gained more than 6%, bringing it close to the $20,000 resistance. This level is still difficult to beat for a digital asset due to the resistance being held at this crossover by bears and indications that Bitcoin is unable to rise above this level.
Fuat Fatullayev, co-founder and CEO of the WeWay ecological Web3 explained that Bitcoin is already known for responding to the release of CPI data in this way. Since there is no expected slowdown in inflation rates in the near future, individual and institutional investors are wary of entering the market.
Inflation is likely to continue to rise above 8% and this will lead to the Federal Reserve tightening its policy. The result will be a bad market environment for risky assets like bitcoin. The broader market is likely to decline, leading to a slump in the cryptocurrency market.
BTC rebounds to $19,600 | Source: BTCUSD on TradingView.com
“Unfortunately, the market continues to face significant headwinds as inflation is still likely to remain above 8% and this will not prevent the FOMC from maintaining its hawkish stance,” Fatullayev told News BTC. The CEO also added that a price rebound does not mean that Bitcoin will not experience further declines.
“It is not devoid of any further negative bearishness. As such, more severe negative selling pressure that may be entered will certainly drive the price of the asset down even more, and investors will instead want to stay on the sidelines and will target an ideal entry point after the volatility that It was presented by the inflation report. It calmed down.”
Bitcoin will need to clear the 50 day EMA to create another bullish trend but the $20,000 resistance will likely make that impossible. However, the Accumulation direction It will provide much-needed momentum to the digital asset if it continues.
Featured image from Investor's Business Daily, chart from TradingView.com
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