US Consumer Price Index in line with estimates offers good longer-term outlook for crypto

US Consumer Price Index (CPI) numbers were the talk of the town throughout the week as it was the first big number after the US jobs report from last week. Both core and overall inflation numbers aligned with expectations as several key components continue to moderate and open the door for the US Federal Reserve (Fed) to normalize the interest rate environment. This number will not trigger a massive reshuffle or a change of sentiment. Instead, the rally will continue but will take a bit longer to get where traders want it to go.

Ethereum, Bitcoin set for 20% gains by March

Markets were on edge this Thursday as US Consumer Price Index numbers were coming out. The Greenback was the overall benchmark and guide on what other asset classes would be doing. With the DXY in the red and EUR/USD tearing through 1.08 in choppy trading, it is clear that this is a bit of a letdown. The rally is still very much intact though. Expect these small fades and small dips on the charts as by Friday or over the weekend the dust will settle and buying of risk assets will restart once again.

Bitcoin (BTC) only took a small step back but stays in the green with over 1.5% gains on the quote board. Expect Bitcoin to pop higher toward $19,036 with the monthly R2 level just above there, triggering some profit-taking once price action gets to there later this week or by the end of this month. Long-term, $21,969 is the level to watch for this first quarter at the current pace, and BTC could print over 20% gains.

BTC/USD daily chart

For Ethereum (ETH), it will be vital to see if traders can close above the 200-day Simple Moving Average (SMA) to consolidate the level and turn the 200-day SMA into support. If Ethereum price can manage that, expect then to see at least $15,000 up for grabs as an important psychological level for this week. Once those boxes are ticked, expect to see $1,688 by the end of this quarter, with a similar 20% gain as in Bitcoin price action.

Experienced traders will notice that both cryptocurrencies are trading in the oversold territory of the Relative Strength Index (RSI). This means that for now the price action will soon need to cool down a bit. A step back would not be illogical as inflation remains sticky, and the Fed could be seen sticking to its hiking cycle with a small drop back to more supportive levels. Ethereum price would see support at $17,000 and Bitcoin price near $13,000.