Bitcoin, the world’s largest cryptocurrency by market capitalization, has recently experienced a setback in its price trajectory. After briefly surpassing the $72,000 mark, Bitcoin faced resistance and failed to sustain its upward momentum, leading to a correction that brought the price below $70,000.
TLDR
- Bitcoin price failed to sustain above $72,000 and corrected gains, trading below $70,000.
- Analysts suggest that the pullback may be due to nervousness ahead of the U.S. CPI release on April 10.
- Bitcoin is currently trading between support at $67,500 and resistance at $71,200.
- A hotter-than-expected CPI release may not significantly impact Bitcoin, but a soft print could revive bullish sentiment.
- Bitcoin’s price action closely follows trends in the Nasdaq and the Nasdaq-to-S&P 500 ratio.
Market analysts have attributed this pullback to investors’ nervousness ahead of the upcoming release of the U.S. Consumer Price Index (CPI) data on April 10.
The CPI, a measure of the average change in prices over time that consumers pay for goods and services, is a crucial indicator of inflation levels. Investors are keenly awaiting this data as it could provide insights into the Federal Reserve’s future monetary policy decisions.
Markus Thielen, founder of 10x Research, cautioned against interpreting Bitcoin’s failed breakout as a definitive bearish trend reversal. He suggested that the pullback likely represents temporary apprehension among investors rather than a fundamental shift in market sentiment. Thielen also noted that the tech-heavy Nasdaq index rose on Tuesday, offering positive cues for Bitcoin and other risk assets, indicating that the dip could be short-lived.
- Currently, Bitcoin is trading within a triangular consolidation pattern, bounded by support at $67,500 and resistance at $71,200.
- Analysts are closely monitoring these levels to determine the cryptocurrency’s next move.
- A breach below the $67,500 support could lead to further downside, potentially targeting the $66,000 or even $65,000 levels.
- Conversely, a clear break above the $71,200 resistance could pave the way for a fresh increase, with the next major resistance lying at $72,500.
The upcoming CPI data release is expected to have a significant impact on Bitcoin’s price action. A higher-than-expected inflation reading may not necessarily inject significant downside volatility into the cryptocurrency market, as investors have already pared back their expectations for the timing and magnitude of future Fed rate cuts.
However, a softer inflation print could put the possibility of a June rate cut back on the table, potentially reviving bullish sentiment in the market.
It is worth noting that Bitcoin’s price action has been closely correlated with the performance of the Nasdaq index and the Nasdaq-to-S&P 500 ratio. This relationship suggests that Bitcoin’s future trajectory may be influenced by broader market trends and the performance of technology stocks.
As investors await the CPI data release, they are also keeping a close eye on other factors that could impact Bitcoin’s price. These include regulatory developments, institutional adoption, and overall market sentiment.
While short-term volatility is expected, many long-term investors remain bullish on Bitcoin’s prospects, citing its potential as a hedge against inflation and its growing mainstream acceptance.
Editor-in-Chief of Blockonomi and founder of Kooc Media, A UK-Based Online Media Company. Believer in Open-Source Software, Blockchain Technology & a Free and Fair Internet for all.
His writing has been quoted by Nasdaq, Dow Jones, Investopedia, The New Yorker, Forbes, Techcrunch & More. Contact Oliver@blockonomi.com
