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December 6, 2023
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Thoughts on Today’s CPI Data & Its Impact on the Crypto Markets!

The post Thoughts on Today’s CPI Data & Its Impact on the Crypto Markets! appeared first on Coinpedia Fintech News

The US FOMC has been affecting the crypto markets for a while. The market appears to have switched on the panic button whenever the minutes are released or when fresh CPI data is released. The markets tend to undergo a minor pullback just before the data is released and further experience a notable upswing for a short period. 

Recently, the FOMC’s minutes were released, wherein the officials believed the rates to remain restrictive, indicating that they could slow down the economy or combat inflation. Now that the CPI rates are about to be released, high volatility is expected to prevail within the space for a while. The impact has already been witnessed, with the BTC price facing a minor pullback for a couple of days.

The week witnessed a harsh sell-off, and if, in surprise, the CPI comes out to be low, then a lot of shorts may start covering, causing a squeeze. Besides, if the data comes out to be high, then a fresh bullish case may emerge, after which the shorts may again take profit, causing some relief. Or else, if the data is according to the estimates, then the trend could resume the same way after the bullish and bearish activity ceases. 

What can be Expected from the Bitcoin & Crypto Markets?

Bitcoin closed the previous day’s trade on a bearish note. The BTC price has not witnessed any specific movement on either side, as the H4/D1 structure remains unchanged. However, some momentum shift is witnessed within the AO and RSI while the token is knocking at the oversold zone, causing some LTF divergence. Other than this, some observations were made that could help in further analysis:

  • Longs made their presence but not more significant
  • OI is making new highs while the price continues to be in the range
  • The Funding rate went negative soon after the latest drop, which then spiked in no time, indicating the bulls to be optimistic and active
  • The cumulative volume data (CVD), a volume indicator, was leading after the drop, which is considered healthy for the bulls

With the CPI data on the horizon, the Bitcoin (BTC) price is struggling hard to find a strong support base and mark a local bottom to continue the bullish trajectory. Therefore, the next interim target could be around $29,000. If bears strengthen their presence, bullish momentum could prevail until it doesn’t close above $26,000. 

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