Bitcoin (BTC) wobbled at $18,000 at the Jan. 12 Wall Street open despite United States inflation continuing to fall.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Bitcoin traders stay wary post-CPI
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD encountering predictable volatility around the release of Consumer Price Index (CPI) data for December.
The first such release of 2023, the event preceded the start of trading on Wall Street, with Bitcoin briefly gapping higher before returning to threaten a breakdown below the $18,000 mark.
In so doing, the largest cryptocurrency copied behavior from one month prior, with resistance at $18,500 remaining untested.
CPI came in at 6.5% year-on-year, in line with the majority of predictions. According to CME Group’s FedWatch Tool, markets were correspondingly betting on a smaller 0.25% interest rate hike from the Federal Reserve at the February meeting of its Federal Open Market Committee (FOMC).
Fed target rate probabilities chart. Source: CME Group
For traders, it was still a case of “wait and see” in spite of the trend of declining inflation persisting in the U.S.
“Not every pump means the bottom is in and a reversal is happening,” popular trader and analyst Crypto Tony cautioned in part of a Twitter update.
“We enter a bull market when we see higher highs and higher lows on Bitcoin which we do not have yet.”Cast your vote now!
Michaël van de Poppe, founder and CEO of trading firm Eight, likewise suggested that Bitcoin could see a temporary drop next before joining a broader risk asset recovery on the back of the CPI data
“Another month in which inflation falls, now lower than November 2021. Month-to-month even showing negative numbers,” he tweeted.
“Fuel for a relief period of 2-4 months for the markets, but probably short-term correction soon for Bitcoin.”
A subsequent post reinforced the chances of downside “probably” setting for BTC/USD, potentially toward $17,700.
BTC/USD annotated chart. Source: Michaël van de Poppe/ Twitter
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