Bitcoin price’s journey into the $43,000-$46,000 range could be another sign that the multi-month correction is over.
Bitcoin and crypto owners are enjoying their gains yesterday (February 10) as the price of bitcoin surged 7.5% shortly after the release of the Consumer Price Index (CPI) by the US Bureau of Labor Statistics (BLS). This shows that inflation continues to worsen as fiat currencies reduce their purchasing power.
Yesterday, after trading below $44,000, bitcoin price surged to an intraday high of $45,850 before falling back to its current range after the release of CPI data and most market indicators.
BTC/USDT daily frame price chart | Source: TradingView
Here’s what some analysts are saying about how yesterday’s CPI could affect Bitcoin’s future price action, and what levels to watch when the world grapples with high inflation.
“We’re in a new cycle,” said Ran Neuner, host of CNBC’s Crypto Trader To mark Bitcoin’s February breakout as part of the cyclical pattern in which it has traded over the past year.
“The CPI pump is confirmation that the interest rate/CPI rise was part of the previous cycle. Since bitcoin broke the trendline, the news has changed, the narrative has been different. This is no coincidence.”
BTC/USDT daily frame price chart | Source: Twitter
As shown in the chart above, this is the second time in less than a year that Bitcoin has reversed its trend after a strong downtrend.
More detailed information on trend reversals is provided by technical analyst CryptoBirb, who did so designation Range-bound trading details over the past year suggest Bitcoin could continue to grow, even past $50,000.”
“Bitcoin’s key line is identified as $51,000 according to price action. Expect this level to act as a magnet for BTC/USD if we see any move higher.”
BTC/USDT weekly frame price chart | Source: Twitter
If it attempts to maintain momentum at this level, bitcoin is close to its $46,300-$46,500 target.
The bullish performance seen in crypto markets in February was addressed in comments by Dalvir Mandara, a quantitative researcher at Macro Hive, who noted that “impressive gains” were made “thanks to the markets hawking the US up -Federal Bank (Fed) digesting higher prices, as well as European Central Bank (ECB) heading for potential rallies in 2022.”
According to Mandara, the fact that crypto markets have been able to move higher despite tighter-than-expected liquidity conditions suggests that macro factors may be affecting them less than they have in the past.
Mandara pointed to Bitcoin’s correlation with tech stocks, which are now “down from 75% last week to 50% this week,” as evidence of this change in impact on Bitcoin’s price.
“Overall, we still think the macro landscape is negative for cryptocurrencies, but on-chain/cash flow indicators have turned more positive, so we are moderately bullish.”
30-day correlation between BTC and NASDAQ | Source: Macro Hive
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