- Bitcoin price takes a small step back in early Wednesday trading.
- BTC jumped over 1% on Tuesday after US Fed chair Powell remained silent in any comments after non-voters pushed back against market euphoria.
- Thursday’s US inflation numbers will be vital and could see a massive pop higher.
Bitcoin (BTC) price is currently trading against a 6% profit for the year after a massive drop in 2022. 2023 has thus far witnessed a nice 180-degree turnaround of sentiment. Although recovery will be long and difficult, growth spurts are being detected, and it is now up to traders to make those count and nurture them to keep the rally going. A surgical trading plan is vital, and a hawkeye on any economic data point is key to trading this rally and getting out of it without any wear and tear.
Bitcoin traders can see this rally through to $19,000 if inflation eases
Bitcoin price is thus showing some healthy signs, and here at FX Street experts will guide you through the numbers to grow that investment or trading portfolio. A big element to remember is the US inflation number of Thursday, which will either see this rally higher or take a step back. The market estimate is for a 6.5% read on the Consumer Price Index (CPI) for December, with the lowest end at 6.3%.
Three scenarios can be distilled from this information. BTC could shoot higher as $19,000 is up for grabs near the end of this month. This would be the case if US inflation on Thursday drops below the lowest estimate of 6.3%, making the Fed more likely to end its hiking cycle quicker. In a second scenario, inflation could fall in line with either 6.3% or 6.5%, followed by some whipsaw action. At the end of the day, as the dust settles, this option would make for a smaller but still visible rally in the price action. In terms of levels, $17,831 is a good profit target at the monthly R1 resistance level for January.
BTC/USD daily chart
The last scenario is a replay of 2022 and would take place in the event that inflation either comes out above 6.5% or even beats the prior 7.1% reading. Expect immediate risk-off sentiment across the board with a stronger US Dollar, equities deep in the red, the VIX jumping massively and cryptocurrencies floored on their backs. The rally of January would unwind in just an hour, and BTC price could be seen hitting $16,020 in search of support as bulls blow up the sell-side with their sell orders in an attempt to exit the market.
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