Bitcoin Price Volatility and On-Chain Activity Increase
The price of Bitcoin has been displaying volatile movements in the past two days, fluctuating between $25,000 and $26,500. This has also led to a surge in on-chain activity.
However, there has been some profit-taking, causing the price of Bitcoin to drop below $26,000. Currently, Bitcoin is trading at $25,922, up 2.8%, with a market cap of $505 billion.
According to on-chain data provider Santiment, Bitcoin remains the dominant player in terms of price and has reached as high as $26.5K. The Bitcoin network has seen interactions from 1.1 million daily addresses, which is the highest in five months. However, traders are now opting for profit-taking after the recent increase.
Despite the price drop, Bitcoin technical indicators continue to show optimism. Crypto analyst Ali Martinez noted that the TD Sequential indicator has signaled a “buy” on the weekly chart for Bitcoin. For this to be confirmed, Bitcoin needs to close above $25,600, potentially reaching targets of $28,350 or even $31,800.
Bitcoin Remains Cautious Ahead of US CPI Data
The US is set to release its CPI data on September 13, and reports suggest that inflation could rise for the second consecutive month. In August, headline inflation could increase to 3.6% from 3.2% in July.
This could have a negative impact on risk-on assets like Bitcoin and other cryptocurrencies. If core CPI data rises, the Fed may announce another rate hike instead of pausing. An unexpected surge in core inflation could reverse the progress made in the past 24 hours, during which the Bitcoin price surpassed $26,000. If bearish conditions persist, Bitcoin could potentially test the support level at $24,578 and even drop to a six-month low of $21,000.
Hot Take: Bitcoin’s Price Fluctuations and Impact of US CPI Data
Bitcoin has experienced significant price fluctuations, leading to increased on-chain activity. While the price has dropped below $26,000, technical indicators suggest optimism for Bitcoin’s future. However, the upcoming release of US CPI data could pose challenges for the cryptocurrency. If inflation rises, it may negatively affect risk-on assets like Bitcoin. The Fed may respond by announcing another rate hike, potentially reversing recent gains. In this scenario, Bitcoin could test the support level at $24,578 and even drop to a six-month low of $21,000. Traders will be closely watching the US CPI data and its impact on Bitcoin’s price and market dynamics.
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