Bitcoin price and the crypto market experienced a positive reaction following the release of the Consumer Price Index (CPI) data in the United States on Tuesday. At one point, Bitcoin even broke above $26,430, demonstrating its position as a riskier asset class. Concurrently, Ethereum (ETH) climbed to highs above $1,850 but has since retraced to trade at $1,745.
The CPI report revealed a softening in the annual inflation rate to 4.9% in April, slightly below economists’ projections. A decrease in the CPI can signal deflation, encouraging investors to spend surplus income on assets with a higher risk-reward ratio like crypto. Analyst Callie Cox from the crypto exchange platform eToro explained that Bitcoin tends to perform well when it comes to inflation data.
This latest CPI data was released just a day before the awaited Federal Reserve monetary meeting. Over 76% of market watchers reportedly expect the Fed to pause interest rate hikes for the first time in several months.
Last week, the US Securities and Exchange Commission (SEC) sued two prominent crypto exchanges, Binance and Coinbase, briefly causing a sell-off in Bitcoin price. Altcoins like Cardano, Solana, and Polygon were most affected, with the SEC labeling them as securities. However, Bitcoin has remained relatively stable, perhaps signaling its maturity as an asset class.
Cryptocurrency analytics company Santiment recently disclosed data suggesting that significant Bitcoin holders are increasing their positions. They’ve been purchasing nearly $26 million worth of Bitcoin, or roughly 1,000 Bitcoins, daily since April 9th. This trend began when Bitcoin hovered around the $28,000 price point, indicating that these major players capitalized on the price drop. This behavior may predict a bullish turn in the near future.
Data from on-chain analytics platform Glassnode supports Santiment’s bullish outlook for BTC. Its data shows that the amount of Bitcoin moved to exchanges by long-standing investors is remarkably minimal, at just 0.004%. This reveals minimal activity from this group of investors, unbothered by ongoing market fluctuations and prominent exchanges’ regulatory challenges.
The daily chart confirms a building uptrend with a buy signal from the Moving Average Convergence Divergence (MACD) indicator. A break and daily close above $26,000, the short-term resistance, could bring more retail investors into the market. However, on the downside, failure to maintain support at $26,000 might negate the anticipated bullish move and lead to a retracement with support at $25,400 and $24,000.
Source: Coingape
