The United States consumer price index (CPI) rose by 4.9% annually, slightly less than the estimated 5% increase. Despite inflation rates stubbornly surpassing the Federal Reserve’s 2% target range, traders may be reassured by the slower pace of increase, as it suggests that current Federal Reserve rate hikes are having their desired effect. If rate cuts indeed proceed as the FedWatch Tool projects, then the outcomes might be positive for equities and cryptocurrencies, such as Bitcoin (BTC).
The cryptocurrency market responded favorably to the CPI data release, with Bitcoin’s price surpassing the $28,000 mark on May 10th. However, the potential for a recession remains a prominent concern, as does the possibility of another banking crisis. Consequently, prices may move within an established range, which could provide a base for the next leg of the rally.
Price analysis for Bitcoin and major altcoins elucidates critical support and resistance levels to watch for in the current market. For Bitcoin, the price broke below the moving averages on May 7th and plummeted to the support line of the symmetrical triangle pattern on May 8th. The subsequent recovery may encounter resistance at higher levels. If the price drops below the support line, the BTC/USDT pair might descend to $25,250—a vital level to watch, as breaking through it could amplify selling pressure and prompt the Bitcoin price to plunge to $20,000.
In contrast, Ethereum (ETH) has been caught between a 20-day EMA ($1,887) and the support line for the past few days. If the price surpasses the moving average hurdles, the ETH/USDT pair may climb to the psychological resistance of $2,000, and then possibly $2,200. Conversely, a failure to sustain above the moving averages may signal a drop to the 61.8% Fibonacci retracement level of $1,663.
Similar trends are noted for other cryptocurrencies, such as BNB, XRP, Cardano, Dogecoin, Polygon, Solana, Polkadot, and Litecoin. Each of these digital assets has experienced price fluctuations influenced by market events and investor sentiment. Breaking or maintaining support and resistance levels will be critical to gauging the potential consequences for each respective currency.
While it is essential to consider these observations when making investment decisions, it is equally important to remember that investing and trading carry inherent risks. Conducting thorough research and due diligence is necessary before taking action in the market.
Source: Cointelegraph
