With Bitcoin currently hovering near $29,500, it appears that the market is bracing itself for the United States Consumer Price Index (CPI) results release, a significant volatility catalyst. Indications from Cointelegraph Markets Pro and TradingView suggest the price action is stabilizing in the run-up to this release. This stabilization may surprise some, as the CPI is a determining factor for the Federal Reserve when deciding on interest rate policy.
As forecasts currently point to a potential decline in CPI for July, some find the predictions unconvincing, stirring a sentiment of uncertainty. Notably, this uncertainty also incorporates the impact that an inflation spike could have on a slew of risk assets, including cryptos. Should the CPI increase, the pressure on these assets could potentially mount due to their affinity towards looser Federal Reserve policy.
Contrary to the underlying worries of inflation re-acceleration, market expectations regarding rate hikes favour a pause at the next Federal Open Market Committee (FOMC) meeting in September. According to the CME Group’s FedWatch Tool, the odds of this eventuality sit comfortably above 85%, presumably providing some reassurance for crypto traders.
In monitoring the conditions of Binance‘s BTC/USD order book, monitoring resource Material Indicators highlighted the potential for a snap downside, considering the lack of bid support immediately below the current spot price. This lack of bid support might just expedite price movements through the dark, illiquid zones, as these regions offer little to no resistance.
Though opinions vary, it is clear that anticipation surrounding both the CPI report and new job numbers could lead to a roller-coaster ride in market values, keeping traders and investors primed and ready for swift actions. Nonetheless, the broader sentiment seems to articulate a slightly biased preference towards a downward trajectory.
To conclude, as the blockchain market eagerly looks forward to the CPI and job reports, it is clear that several factors could influence the impending direction that Bitcoin, among other cryptocurrencies, may take. While seasoned traders note the possibility of a drop, the market’s liquidity position suggests a potentially quick price movement into dark and unpredictable territories, reflecting the perennial intrigues associated with the global crypto market landscape.
Source: Cointelegraph
