Bitcoin (BTC) eyed key resistance near $25,000 on March 14 as markets awaited key economic data from the United States.

BTCUSD

BTC/USD 1-day candle chart (Bitstamp). Source: TradingView

Hopes CPI will bring Bitcoin “consolidation”

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD making monthly highs of $24,917 on Bitstamp overnight.

The pair remained buoyant after the impact of multiple U.S. bank closures sent crypto markets skyrocketing.

Now, all eyes were temporarily on the Consumer Price Index (CPI) print for February when it came to short-term BTC price action.

A classic crypto volatility catalyst in itself, last month, CPI showed an unwelcome slowdown in inflation abating; this, in turn, gave rise to fears that the Federal Reserve would keep interest rates higher for longer.

However, risk assets had little time to worry as the banking crisis overshadowed the inflation debate. On the day, expectations already pointed to the Fed abandoning rate hikes altogether — regardless of CPI trends.

“Bitcoin sweeping the highs here as it’s testing range high at $25K,” Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight, told Twitter followers.

You’d preferably want to see some period of consolidation (CPI day today) before continuation. If markets sweep range high at $25.2K, make a bear. div and fall back, I’d be looking for shorts to $23K.

Chart

BTC/USD annotated chart. Source: Michaël van de Poppe/ Twitter

On-chain monitoring resource Material Indicators pointed to a potential shake-up in order book composition thanks to CPI.

Should the data outpace expectations, bid support could “rug,” it warned, opening up the path for a deeper BTC price correction.

“Asia may continue to eat ask liquidity and clear a path for volatility before the CPI Report,” it commented about moves on the BTC/USD pair on Binance.

If CPI is hot, I expect support to rug. If it’s cold, and another bank doesn’t go under before lunch, a bigger short squeeze.

An accompanying chart from co-founder Keith Alan showed $23,600 and $25,000 as the principal areas of bid and ask liquidity, respectively.

BTCUSDT

BTC/USD order book data (Binance). Source: Keith Alan/ Twitter

Material Indicators added that in order for Bitcoin’s overall rally to have legs, it would need to deliver multiple weekly closes above its 200-week moving average (WMA).

“Need full candles above the 200 WMA to consider a breakout,” it confirmed.

Chart

BTC/USD 1-week candle chart (Bitstamp) with 200MA. Source: TradingView

CPI: “Manufactured” or “in some solid shape”?

Lower-than-expected CPI readings would boost the case for the Fed to lay off further rate hikes and loosen financial conditions.

For his part, U.S. President Joe Biden last week appeared to have no concerns that inflation was on the right track, even before the banking crisis fully erupted.

In a White House press conference, Biden said he was “optimistic we’re going to get the — the CPI next week. Hopefully, we’ll be in — in some solid shape.“

Among analysts, however, there were suspicions. A surprise drop in CPI would be most beneficial for a Fed currently backed into a corner by recent events, popular trader xTrends implied.

“I believe tomorrows CPI will be manufactured to prevent a market crash, and it will be silently revised weeks later like they did with the last few CPI numbers,” he revealed in part of the Twitter commentary.

A starker warning on macro came from Cathie Wood, CEO of ARK Invest, who issued a grim forecast for the consequences of any further rate hikes.

In a dedicated Twitter thread on March 13, Wood, under whose leadership ARK continues to increase crypto exposure, called for a Fed “pivot” on rates.

“If the Fed continues to focus on lagging indicators like the CPI, and does not pivot in response to the deflationary forces telegraphed by the inverted yield curve, then this crisis will devour more regional banks and further centralize, if not nationalize, the US banking system,” she wrote.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Bitcoin bull market is still going strong, on-chain data shows

Bitcoin bull market is still going strong, on-chain data shows

Bitcoin’s (BTC) price outlook remains positive in the short term despite its recent stabilization, on-chain data suggests, propelled by easing selling pressure by long-term holders and activity from large-wallet investors. 

More Bitcoin News

Dusk price sets the stage for a 20% rally

Dusk price sets the stage for a 20% rally

Dusk price is currently being rejected at around $0.426 level. The on-chain metric suggests DUSK growing network and dormant wallets are moving upwards again. A daily candlestick closing below $0.286 would invalidate the bullish thesis.

More Cryptocurrencies News

Digital asset inflows reach record high year-to-date

Digital asset inflows reach record high year-to-date

CoinShares' weekly digital asset flows, released on Tuesday, reveal that digital assets recorded a three-week consecutive rise in inflows, amounting to a record high of $14.9 billion already this year.

More Cryptocurrencies News

Bitcoin long-term holders begin re-accumulation after Semler Scientific and Mt Gox make major whale moves

Bitcoin long-term holders begin re-accumulation after Semler Scientific and Mt Gox make major whale moves

Bitcoin declined briefly from the $70,000 mark on Tuesday as Semler Scientific and Mt Gox made notable whale moves. Glassnode also shared key on-chain insights that breathe clarity into the market's current state.

More Bitcoin News

Bitcoin: BTC struggles, but $80K is at striking distance Premium

Bitcoin: BTC struggles, but $80K is at striking distance

Bitcoin (BTC) price is in a good position to resume the bull rally despite the recent struggle. Optimism will restart if BTC overcomes a critical hurdle and flips it into a foothold. In such a case, the pioneer crypto will be slated to push to a new all-time high (ATH). 

Read full analysis

BTC

ETH

XRP