Bitcoin Price Forecast: BTC Surges Above $80,000 Amid US CPI Data Anticipation
Bitcoin rebounded slightly above $80,000 after a nearly 3% decline due to weak ETF data and macroeconomic concerns. The market is experiencing heightened volatility ahead of significant US economic reports. Institutional demand is waning, with substantial BTC transfers from Mt. Gox, while the RSIs indicate potential recovery.
On Tuesday, Bitcoin (BTC) saw a slight recovery, trading above $80,000 after declining nearly 3% the previous day. The weak performance of US spot Exchange Traded Fund (ETF) data contributed to this decline, with $278.40 million in outflows reported. Investors are bracing for increased volatility due to the upcoming releases of the US Consumer Price Index (CPI) on Wednesday and the Producer Price Index (PPI) on Thursday, which are likely to affect risky assets such as Bitcoin.
During the Asian trading session on Tuesday, Bitcoin hit a low of $76,606 but rebounded to above $80,000 by early European trading. The previous day’s price correction resulted in significant liquidations across the crypto market, summing up to $955.71 million within 24 hours. According to Coinglass data, the largest liquidation amounting to $5.26 million occurred on Binance for BTCUSDT, illustrating the intense market fluctuations.
Agne Linge, Head of Growth at WeFi, remarked on the prevailing conditions, stating, “The crypto market continues to exhibit risk-on behavior, with investor sentiment remaining cautious despite key developments.” He added that the volatility that began on March 3 persists, with ongoing sell-offs impacting long traders mainly due to diminished open interest. This situation is compounded by external factors such as the trade tensions between the United States and other countries, which are negatively influencing investor sentiment.
Bitfinex’s report emphasized the mixed signals from current macroeconomic conditions in the US, highlighting steady job growth alongside inflationary pressures. The resilience of the job market, reflected in a net addition of 151,000 jobs in February, contrasts with a rise in unemployment to 4.1% due to government job cuts. Eren Sengezer, European Session Lead Analyst at FXStreet, noted that concerns over a potential economic downturn are affecting both crypto and stock markets as investors await economic indicators on business optimism and job openings.
Institutional demand for Bitcoin appears to be diminishing as the current week begins, with significant outflows from Bitcoin spot ETFs amplifying concerns. Followed by the transfer of over 11,833 BTC from the defunct Mt. Gox exchange, traders are advised to remain vigilant. Such movements may indicate intentions to sell, thereby increasing bearish sentiment in the market.
Despite the overarching bearish trends, there are signs of optimism, such as the approval of Bitcoin and Ethereum trading services by Spanish bank BBVA and a substantial capital raise by MicroStrategy through its Series A Perpetual Strike Preferred Stock issuance. Additionally, the Relative Strength Index (RSI) signals a potential recovery for Bitcoin, as it bounces from oversold territory, although sustaining this upward momentum requires the RSI to exceed the neutral level of 50.
In summary, Bitcoin has witnessed a temporary recovery above $80,000 after experiencing a significant decline, attributed to weak institutional demand and Nasdaq’s approaching macroeconomic data releases. Experts express caution regarding the ongoing volatility influenced by external economic factors, while traders should monitor potential liquidation impacts. Despite current challenges, emerging positive developments from financial institutions hint at opportunities ahead for Bitcoin.
Original Source: www.fxstreet.com
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