Bitcoin (BTC) eyed key resistance near $25,000 on March 14 as markets awaited key economic data from the United States.
Expect CPI to bring Bitcoin “consolidation”
Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD hit monthly highs of $24,917 on Bitstamp overnight.
The pair remained buoyant after the impact of multiple US bank closures sent crypto markets soaring.
Now, all eyes were temporarily on the February Consumer Price Index (CPI) print as it pertains to short-term BTC price action.
A classic crypto volatility catalyst in itself, last month the CPI showed a unwanted slowdown in reducing inflation; this, in turn, raised fears that the Federal Reserve would keep interest rates higher for longer.
However, risky assets had little time to worry as the banking crisis overshadowed the inflation debate. On that day, expectations were already pointing to the Fed abandoning rate hikes altogether, regardless of CPI trends.
“Bitcoin sweeping the highs here as it is testing a high $25,000 range,” Cointelegraph Contributor Michaël van de Poppe, founder and CEO of trading company Eight, said Twitter followers.
“I would prefer to see some period of consolidation (the current CPI) before continuing. If the markets break through the range high at $25.2K, go for a downtrend. div and back, I’d be looking at shorts to $23K.”
On-chain monitoring resource material indicators pointed to a possible shakeup in order book composition thanks to the CPI.
If the data beats expectations, supply support could “carpet,” he warned, opening the way for a deeper BTC price correction.
“Asia may continue to eat liquidity demand and clear the way for volatility ahead of the CPI Report,” he said. commented about movements in the BTC/USD pair on Binance.
“If the IPC is high, I expect the support to increase. If it’s cold and another bank doesn’t sink before lunch, a bigger squeeze.
An accompanying chart from co-founder Keith Alan showed $23,600 and $25,000 as the top supply and demand areas for liquidity, respectively.
Material Indicators added that for Bitcoin’s overall rally to have legs, it would have to offer multiple weekly closes above its 200-week moving average (WMA).
“It takes full candles above 200 WMA to consider a breakout,” he confirmed.
CPI: “Manufactured” or “in some solid form”?
Lower-than-expected CPI readings would boost the case for the Fed to suspend further rate hikes and loosen financial conditions.
Related: Fed Initiates ‘Stealth QE’: 5 Things to Know About Bitcoin This Week
For his part, US President Joe Biden last week seemed unconcerned that inflation was on the right track, even before the banking crisis fully erupted.
In a press conference at the White House, Biden saying he was “optimistic, we are going to get the CPI next week. Hopefully, we’ll be in — in solid shape.“
Among analysts, however, there were suspicions. A surprise drop in the CPI would be more beneficial to a Federal Reserve currently cornered by recent events, popular trader xTrends has hinted.
“I think tomorrow’s CPI will be fabricated to prevent a market crash, and quietly revised weeks later, just like they did the latest CPI numbers,” he said. revealed in part of the Twitter comment.
Cathie Wood, chief executive of ARK Invest, issued a clearer warning about the macroeconomic consequences of any further rate hikes.
In a dedicated Twitter thread on March 13, Wood, under whose leadership ARK continues to increase crypto exposurecalled for a “pivot” from the Fed on rates.
“If the Fed continues to focus on lagging indicators like the CPI, and does not pivot in response to the deflationary forces telegraphed by the inverted yield curve, then this crisis will gobble up more regional banks and further centralize, if not nationalize, US banking. system,” he wrote.
The views, thoughts, and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
