U.S. Economy

Bitcoin price rallies to $29.4K as traders gear up for this week’s CPI print

BTC’s rally to $29,400 comes as the all important CPI report releases on April 12 and traders debate whether the Federal Reserve will pivot.

Bitcoin (BTC) rose to its highest level in ten months on April 10 as traders await this week’s April 12 Consumer Price Index report to gain deeper insight into the Federal Reserve’s fight against sticky inflation. If the report shows inflation dropping, it could be the next possible catalyst that furthers BTC’s upward move. 

On April 10, BTC price soared 3.37% to over $29,300 after a quiet Easter weekend. Interestingly, Bitcoin’s intraday gains appeared alongside a drop in U.S. equities, a rare decoupling that highlights the coin’s diminishing risk-on characteristics.

BTC/USD year-to-date returns versus U.S. stock indexes. Source: TradingView

The pre-CPI dynamic could be in effect

The Bureau of Labor Statistics will release March Consumer Price Index (CPI) data on April 12, which is expected to show inflation down to 5.1% from 6.0% year-over-year previously.

A slowdown in headline CPI increases the prospects of the Federal Reserve shifting in a more dovish direction. Conversely, persistent inflationary forces could lead traders to bet on more interest rate hikes in May.

Bitcoin’s rise above $29,000 suggest that crypto traders have been pricing in a drop in inflation, which, in turn, could lead to a potential Fed pivot.

Nonetheless, the U.S. Dollar Index (DXY), which tracks the greenback’s strength against a basket of top foreign currencies, climbed 0.7% on April 10, which, alongside a weaker U.S. stock market, shows macro investors see a rate hike ahead.

DXY daily price chart. Source: TradingView

In fact, the market sees a 70% probability of the Fed lifting rates by 25 basis points at its meeting in May, according to the CME Fed Watch Tool. That could be due to a tightening labor market that gives the Fed more ammunition to continue raising lending rates in the future.

Could Bitcoin hit $30,000 in April?

From a fundamental perspective, Bitcoin looks prepared to hit $30,000 ahead of the Fed FOMC. However, its likelihood of holding those gains will depend on the inflation data, as mentioned above.

Related: CPI to spark dollar ‘massacre’ — 5 things to know in Bitcoin this week

Meanwhile, from a technical analysis standpoint, Bitcoin must close above its weekly resistance range — defined by the $29,500 to $32,000 area — to eye a run-up toward $40,000.

BTC/USD weekly price chart. Source: TradingView

This range served as support in the December 2020 to February 2021, May 2021 to July 2021 and January 2022 to March 2022 sessions.

In the event of a pullback from the mentioned range, BTC price risks a sharp decline toward its 50-week exponential moving average (50-week EMA; the red wave) near $25,250 and its 200-week exponential moving average (200-week EMA; the blue wave) near $25,000.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

3 Bitcoin trading behaviors hint that BTC’s rebound to $24K is a ‘fakeout’

BTC price surged above a key resistance cluster, but its market structure and technical analysis suggest the move is just another trap.

Bitcoin (BTC) price rallied toward $24,200 on July 28 after a near-10.5% surge that began a day earlier.

The gains appeared after Federal Reserve Chairman Jerome Powell signaled intentions to slow down the Fed’s prevailing tightening spree. This prompted some Bitcoin analysts to predict short-term upside continuation, with pseudonymous analyst CryptoHamster seeing BTC at $26,000 next.

But BTC’s potential to recover entirely from its ongoing bearish slumber appears low for at least three key reasons.

Bitcoin bulls have been duped before

Bitcoin established its record high of $69,000 in November 2022. Since then, the cryptocurrency has declined by more than 60% while undergoing several mini pumps on its way down. 

On the daily chart, Bitcoin has rebounded at least five times since November 2021, securing 23%-to-40% gains on each recovery. Nonetheless, it has continued its correction every time after forming a local price top around its exponential moving averages (EMA) and then falling to new yearly lows.

BTC/USD daily price chart featuring ‘fakeouts.’ Source: TradingView

This time looks no different, with Bitcoin facing a bullish rejection in June and recovering nearly 17% a month later. Notably, BTC price faces interim resistance in its 50-day EMA (the red wave) at around $23,150, with a breakout clearing its way toward $27,000, coinciding with the 100-day EMA (black).

At $27,000, the price would still form a lower high compared to the previous local tops. So, that technically raises the possibility of another bearish continuation move.

High selling, low buying volume

Interestingly, the volume behavior during the ongoing Bitcoin correction shows a greater interest in selling the coin at local tops.

The daily chart below illustrates this by highlighting the volume readings during downtrends and uptrends since November 2021. For instance, the last two big price declines in May and June coincided with a sharp increase in selling volumes.

BTC/USD daily price chart. Source: TradingView

In comparison, the follow-up rebounds to those price declines accompanied modest to lower trading volumes. The ongoing volume behavior looks the same, peaking during the downtrend and dropping as the price recovers.

This suggests a weakening upside momentum, which may lead to another price correction.

BTC to equities correlation flips back to positive

Bitcoin is once again tailing stock market trends despite briefly decoupling from them in early July.

For instance, on July 28, the day-to-day correlation coefficient between Bitcoin and the tech-heavy Nasdaq Composite stood near 0.66. That includes declines in both markets after the U.S. gross domestic product (GDP) plunged for a second consecutive quarter.

BTC/USD and NDAQ daily correlation coefficient. Source: TradingView

That officially confirms that the U.S. has entered a “technical recession,” which could weigh negatively on the stock market. Therefore, Bitcoin’s downside prospects appear high if its positive correlation with the stock market continues.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.