The Impact of US Inflation Data on Bitcoin Price
The latest US inflation data has had a significant effect on the price of Bitcoin and the broader cryptocurrency market. The Labor Department’s report shows that inflation increased more than expected in January, driven by higher shelter prices. Additionally, the consumer price index (CPI) saw a 0.3% increase for the month, with a 3.1% annual rate.
Bitcoin Price Retreats Amid Higher-Than-Expected CPI Figures
The higher-than-expected CPI figures pose challenges for the Federal Reserve (Fed), which aims to adjust monetary policy to reach its 2% annual target. The January increase in inflation may delay the Fed’s plans to ease rates, disappointing those who expected inflation to decrease and prompting a reassessment of potential rate adjustments.
This outcome has caused market cap losses in cryptocurrency and equities markets, leading to a decrease in the Bitcoin price from above $50,000 to below $49,000. This mild retrace may polarize crowd sentiment and potentially result in panic sales.
Bitcoin’s Market Cycle Patterns
A market expert has identified a pattern in Bitcoin’s market cycles related to the 20 Week Exponential Moving Average (EMA). Despite concerns about inflation data, this analysis suggests that Bitcoin’s price behavior follows a consistent six-step pattern with implications for support and potential correction levels.
The pattern involves breaking above the moving average, retracing and falling below it, breaking above it again to start a true rally, creating a false retest of support, embarking on a second run, and potentially experiencing corrections without dipping below $40,000.
Hot Take: Encouraging Signs for Bullish Investors
The analysis suggests that during the ongoing bull run, the Bitcoin price may not dip below $40,000, even with anticipated corrections. This is particularly encouraging for bullish investors who are looking for opportunities in the market.
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