The US CPI Rates Came Out Hotter Than Expected, Causing Volatility in Bitcoin Price: Here’s What Next!
- US CPI data has added fuel to the bullish momentum which was ignited with the approval of the spot Bitcoin ETF
- The rise in the BTC price is expected to end up in a notable sell-off soon, as the bulls are closer to a major exhaustion
Across the board in December, the CPI rates came out at 3.4% higher than the expected 3.2%, with the index rising by 0.3% versus the 0.2% expected. The CPI that had made the market extremely volatile had been largely ignored, with the ETF narrative dominating the market’s direction. Now that the YoY and the core have risen, the disinflation is over, and the inflation is now poised to accelerate.
With this, a decent reaction on the DXY Index and Yeilds is seen, but nothing too insane. However, the Bitcoin price is rising with the news and is getting closer to the upper resistance, which appears to be extremely crucial at this point. If the markets can digest the minor BTC sell-off that has kicked off, then market volatility may soon be revived.
What happens next? Will BTC bulls remain at highs ($48,000 for the time being) as they have in the past? Or do they get something extra to get to $50,000?
The US CPI rates have created enough volatility within the crypto space, specifically the BTC price. The token surged above the crucial resistance of the rising parallel channel, indicating a breach above the pattern. The upswing does not appear to be sustained as it hits the upper bands of the Bolinger, which usually results in a healthy pullback to the average levels, as it happened in the recent past. Moreover, the RSI, which is trading in an ascending trend, is testing the upper resistance again, which may result in a steep rejection.
All these indicators point towards a significant Bitcoin pullback, which may drag the levels close to $41,000. However, the support at $40,000 may be defended strongly as the bull remains pretty active at these levels. Therefore, history is expected to repeat as the Bitcoin (BTC) price is believed to undergo a significant retracement soon after the impact of the US CPI rates waned. Until then, market participants may enjoy a decent ride towards new yearly highs.
