Bitcoin’s Price Faces Increased Downside Risks Following CPI Data Release
Bitcoin’s price has experienced volatility following the recent US CPI data release, peaking at $98,000 before declining to $96,000. Analysts, including Negentropic and Daan Crypto Trades, predict further downside risk targeting the $92,000 level unless liquidity and market conditions improve. The $90,000 mark is identified as a critical danger zone that could influence future price movements.
In the aftermath of the recent release of the United States Consumer Price Index (CPI) data, Bitcoin’s price briefly rebounded to the $98,000 level, providing renewed optimism among investors. Nevertheless, this brief spike was followed by a notable decline in Bitcoin’s price just hours later, causing analysts to identify the potential for further downward movement toward critical support levels.
Post-CPI data, Bitcoin is facing increased pressure, as highlighted by Negentropic, a co-founder of Glassnode. This expert warns of heightened market volatility, indicating that if Bitcoin fails to maintain essential support levels, it could result in a significant price breakdown. After the CPI report indicated higher-than-expected inflation, Bitcoin reached liquidity at $94,000 before peaking at $98,000 but has since retraced to around $96,000.
In recent days, Bitcoin has exhibited declining network performance coinciding with weak liquidity and reduced network growth, suggesting a bearish outlook for the cryptocurrency. Should these adverse trends continue, Negentropic projects that Bitcoin may aim for the $92,000 level as its next target. Consequently, he advises investors to remain cautious amid the current uncertainty.
Daan Crypto Trades, an analyst and investor, further explored Bitcoin’s liquidity acquisition following the CPI release, noting that most liquidity was gained from lower time frames. He pointed out that despite the recent minor dips, significant untapped liquidity remains at higher levels. If Bitcoin can reverse its current downward trajectory, it could catalyze a bullish movement.
The $90,000 level has been identified as critical, with concerns that a breach could liquidate many long positions, as this area has historically served as a rebound point for Bitcoin.
Despite the fluctuations in Bitcoin’s performance, Axel Adler Jr., a CryptoQuant author, emphasizes the importance of focusing on trends in profit changes rather than merely observing holder losses. During Bitcoin’s last consolidation near $70,000, it required an additional two months to foster a new upward impulse. He suggests that the prevailing market dynamics, particularly those influenced by developments surrounding the Trump administration and Bitcoin’s designation as a strategic reserve, could lead to a new trend cycle significantly distinct from previous patterns.
In conclusion, despite a temporary rebound to $98,000, Bitcoin’s price faces significant downside risks following the CPI data release. Analysts continue to monitor critical support levels, particularly the $92,000 threshold, which could have further implications for market stability. Investors are encouraged to remain vigilant as Bitcoin navigates this uncertain territory, balancing between potential rebounds and the risk of deeper declines.
Original Source: bitcoinist.com
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