- Bitcoin price shows a strong surge in buying pressure that has triggered a 22% upswing in the last three days.
- This uptick is now facing a question, retrace and rebuild momentum or continue the ascent and tag $30,000.
- Investors need to watch out for signs emerging on a lower timeframe to determine where BTC is headed next.
Bitcoin (BTC) price has recovered the losses it experienced by the end of last week. The sell-off was caused mainly due to failing banks in the United States which in turn triggered a depeg in major US-based stablecoins. However, by the end of the week, there were assurances that the Federal Reserve would make affected investors whole, which instilled confidence and catalyzed this recovery rally.
Also read: USDC mayhem catalyzes recovery rally in Uniswap and Curve DAO
Bitcoin price at an inflection point
Bitcoin price slipped below its ascending parallel channel on March 2 and what followed next was four long days of tight consolidation. The sell-off that began in the 2nd week of March accelerated, leading to 10% losses by March 9.
As the US banks started collapsing consecutively, the stablecoin de-peg caused panic in the markets, pushing holders to swap their affected stables into other safer alternatives like unaffected stablecoins, including USDT, BUSD and TUSD. Others had a more creative approach and swapped their USDC to BTC. Some market participants purchased USDC at a discount, hoping that USDC would go back to the peg.
Additionally, assurances from the concerned authorities were the key that initiated the rally. Following this was Biannce CEO openly stating that he would convert the $1 billion of the Industry Recovery Fund into Bitcoin (BTC), Ether (ETH) and Binance coin (BNB)
So far, Bitcoin price has managed to overcome the $23,000 hurdle and is currently hovering around $24,290 after collecting the buy-stop liquidity (BSL) resting above $24,000. There is another set of BSL above the $25,000 psychological level.
If Bitcoin price manages to flip this resistance barrier into a support floor, it would trigger a rally to the next major hurdle at $28,000 and the next psychological level at $30,000.
BTC/USDT 12-hour chart
Exploring BTC’s bearish case and factoring in US CPI
While the bullish outlook for Bitcoin price is mainly driven due to panic and frenzy, investors need to be cautious of jumping on the bull train at the wrong time. The upcoming US Consumer Price Index (CPI) announcement on March 14 at 12:30 GMT is a key event that will potentially turn the tide.
Typically, a higher-than-anticipated CPI number would be bad news for investors since it would warrant tighter interest rates from the Fed. A tighter interest rate, especially a 50 basis point (BPS) hike in the decision, will be better for the US Dollar and not so much for the risk-on assets like cryptos or the stock market.
To summarize, a higher CPI would be bearish for Bitcoin price in the short-term, i.e., BTC could plummet in the short-term, causing bulls that hopped on the long-only trade late to likely get liquidated.
However, the chart attached below shows a different outlook, an opposing one over longer durations. Specifically, Bitcoin price shows a steady decline over the course of when CPI comes in hotter-than-expected
There were two non-events where BTC rallied instead of dropping when the CPI number came in higher than the consensus.
BTC/USDT 1-day chart vs. CPI reaction
So, all-in-all, investors who are confident in their bullish positions need to rethink their stance as CPI is more than likely going to come in hotter. The reason for this can be found in Fed Chair Jerome Powell’s testimony on March 8, where he described that the inflation was growing and their efforts so far were not enough. This hawkish stance suggests the possibility of the CPI coming in hotter-than-anticipated, which could cause the markets to drop, catching the bulls off-guard.
A daily candlestick close below the $22,419 level will invalidate the bullish thesis for Bitcoin price. A breakdown of a critical support floor could potentially plunge BTC into the weekly Fair Value Gap’s (FVG) midpoint at $18,783.
More crypto news
- Fed Chair Powell targets bringing inflation back to 2%, Bitcoin price stays around $22,000
- Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Bullish momentum fades for BTC and ETH, XRP suffers SVB woes
- US Department of Justice investigating the collapse of Terra stablecoin: Report
- Is Bitcoin's safe haven narrative back as US banks start to go belly-up?
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Bitcoin Price Forecast: Analysts anticipate increased volatility as the US presidential election looms
Bitcoin price teased its all-time high of $73,777 last week but declined to trade below $69,000 on Monday. Analysts suggest that market volatility is expected to rise as the US presidential election approaches.
Litecoin poised for double-digit decline after breaking ascending trendline
Litecoin breaks and closes below an ascending trendline, signaling a change in market structure. On-chain metrics paint a bearish picture, as LTC’s dormant wallets are active, and the NPL indicator shows a negative spike.
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC, ETH and XRP decline ahead of US elections
Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) all faced resistance at crucial levels ahead of the US Elections, leading to a price decline. As of Monday, they neared key support levels, and a firm close below these marks could signal further declines.
21Shares files S-1 for XRP ETF amid ongoing tension between Ripple and SEC
21Shares filed an S-1 registration with the Securities and Exchange Commission (SEC) on Friday for an XRP exchange-traded fund (ETF). While the chance of approval is slim with the current SEC administration, the landscape could change after the upcoming elections.
Bitcoin: New all-time high at $78,900 looks feasible
Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.