Bitcoin Price Decline Amid Rising Inflation Fears and Trade War Concerns
Bitcoin’s price fell 2.3% to approximately $81,500 amid falling inflation rates in the US. Financial markets displayed a muted response to positive inflation data, with analysts linking this to ongoing trade war concerns. Expectations for Federal Reserve interest rate cuts remain low, and Bitcoin faces significant resistance at its 200-day moving average.
On March 13, Bitcoin (BTC) saw a 2.3% decline, trading around $81,500 as the US experienced falling inflation rates. This downturn occurred despite positive inflation news as the Producer Price Index (PPI) data revealed a 3.2% increase for the year ending February. The BLS indicated a slight rise in prices for final demand goods offset by a decrease in final demand services.
The cooling inflation has impacted not only Bitcoin but also the US dollar strength, failing to provoke a rebound in financial markets. According to The Kobeissi Letter, the market’s muted response to promising inflation data reflects broader concerns, particularly related to the ongoing US trade conflict. They noted that in the past, similar data would have fueled significant gains in the S&P 500.
Furthermore, analysts anticipate that inflation trends may escalate trade war efforts, with potential market volatility lying ahead. As the Federal Reserve prepares for an interest rate decision, current projections indicate a minimal probability of a rate cut in March, maintaining a steady path in light of recent remarks from Fed Chair Jerome Powell.
Bitcoin’s trading patterns reveal it is caught between liquidity levels on exchange order books, encountering significant resistance at the 200-day simple moving average (SMA). Keith Alan of Material Indicators emphasized that reclaiming this resistance appears unlikely under the current market conditions, while monitoring tools indicate major resistance points just below $85,000.
In conclusion, Bitcoin’s recent price drop reflects broader market concerns, driven by falling inflation rates and the impending US trade conflict. The Fed’s steady approach to interest rates contributes to the market’s recent inertia, while key resistance levels remain intact for Bitcoin. Participants in the market should prepare for potential volatility as conditions evolve, underscoring the importance of informed decision-making in investment.
Original Source: cointelegraph.com
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