The latest US inflation reports were a bit too hot to handle. According to the Fed reports, tight monetary policies will continue, and that has resulted in another price dip for the biggest cryptocurrency by market volume. It occurred just minutes after the news broke out, which also sent stock futures down a bit too.
Traders are always keeping an eye on the inflation. It has remained high for months, but signs point to it slowing down. This should give the Fed some space to pause the interest rate hike, but there’s obviously more work to be done.
Luckily, it didn’t take long for the price to regain its earlier levels. It ticked back to over $22,000 on February 14, showing composure we haven’t seen for a long time. Last week, the price has stalled, and this week’s performance was more or less expected.
Five-Day Highs on CPI
According to data from Cointelegraph and TradingView, CPI data broadly conforms to market expectations. There’s a lack of panic on the crypto market, and the trading range is tight. Whales have reduced long BTC exposure, setting up a possible trap for retail investors.
As investors are digesting the latest FED and SEC reports, it’s great that Bitcoin has managed to regain its $22K level. Previously, it has managed to hold the $22,500 support level for 20 days. Since then, it has traded that level with a tight trading range and resistance at $22,000. Things look even better after SEC chairman Gary Gensler told crypto companies to ‘follow the law’ early in January, which looked like it could lead to a crackdown on the crypto market. All crypto companies are now legally obliged to register with the SEC, and that hasn’t managed to drop the price further. And that’s a great thing.
According to traders, further pressure from the authorities is expected. The traditional market looks for further data before adding bullish positions, with investors happy to wait until the Fed displays conviction on the rate increase movement. While the odds currently favor bears, there’s no question that a lot needs to happen before they take over the market.
In the short term, Bitcoin is expected to retain the current outlook. However, traders are more interested in the long-term outlook, which looks like it might contain a price hike. Of course, it will all align with the macro-economic market and the expected Fed price hike which might hit 25 basis points. The next two meetings are in March and May, and they might have a more profound impact on Bitcoin’s price.
One thing’s for sure – 2023 is shaping up to be a different year for Bitcoin. A continued inflation slowdown will give the crypto market and Bitcoin the fuel they need and put them in a great position for further price hikes.