Bitcoin (BTC) saw continued rejection below $22,000 on Feb. 14 as markets braced for the impact of macroeconomic data.
Bitcoin and CPI data: “Expect volatility”
Data from Cointelegraph Markets Pro and TradingView showed that the BTC/USD pair failed to expand beyond $21,800 ahead of the US Consumer Price Index (CPI) print for January.
This data, due to be released at 8:30am ET, is a classic catalyst for risk asset volatility. In addition, it has already been described as “the most important CPI publication”.
Thus, cryptocurrency market participants were expecting a busy trading day, with $19,000 and $25,000 on the table as potential targets depending on how far the estimate results fall.
“We’ll probably see that Bitcoin rally to $24,000-$25,000 if tomorrow morning’s CPI number shows more disinflation in the positive direction,” wrote Venturefounder, a contributor to on-chain analytics platform CryptoQuant, in part of a Twitter update.
“Conversely negative surprise would set up a perfect retracement to $19,000-$20,000 per BTC. A very important day. Expect volatility.”
CPI was expected at 6.2% yoy, up from 6.4% in the prior month, increasing 0.1% to 0.5% m/m.
“Relatively high expectations if you combine this with the previous trend,” argument that day Michaël van de Poppe, Cointelegraph contributor, as well as founder and CEO of the trading company; Eight.
go poppe ya bet for the “final phase” of Bitcoin’s current retracement, with $20,500 a key level for bulls to hold.
IPC Data Is “Crucial” In Determining Cryptocurrency Losses
In its latest market update, firm QCP Capital pointed to factors beyond the data as a cause for concern for cryptocurrency investors.
The recent legal process against the blockchain company Paxos, which issues the stablecoin Binance (BUSD), could be the tip of the iceberg for US regulatory policy, he warned.
“As the regulatory hammer is still against the industry (possibly until the 2024 election), the rise in cryptocurrency market cap looks even more subdued from that perspective a,” he wrote.
“Hence today’s CPI release is of crucial importance in deciding the extent of the decline for cryptocurrencies.”
The QCP went on to say that there was a mismatch between expectations and reality regarding the Federal Reserve’s interest rate cuts, even though inflation was theoretically subsiding.
“In the rate market, we are now pricing in a terminal rate of 5.2% followed by a 30 basis point cut for December 23, a monumental advance from the 4.9% terminal and the 50 basis point cut just 2 weeks ago. “, the report highlights.
“Risk assets have clearly not adjusted to this rise in rate expectations, and we expect today’s release to put all markets in line with either a sell-off in equities (for a higher-than-expected ) or with a rise in rates (by a figure lower than expected)”.
The Fed will not call a rate change meeting until the third week of March, before which the CPI data for February will be released.
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