Bitcoin Approaching $22K, Market Gets New Reason to Celebrate?

Bitcoin’s price has risen $500 over the last hour. This is likely to be confirmation by the U.S. of what may have been a brief-lived high in inflation metrics. A significant event will take place today at the U.S. Central Bank (Fed) and could see the crypto market continue to be bullish.

Bitcoin (BTC), currently trading at $21,800 has made a 1% profit over the last 24 hours, and suffered a 6% drop in 7 days. Bitcoin (BTC) was rejected above $22,000, and appears to be on the right track to test those resistance levels again.

BTC’s price with sideways movement on the 4-hour chart. Source:View TradingView BTCUSDT

An increase in inflation is one of the factors that negatively impacted Bitcoin, risk-on assets, and the crypto market. Inflation has been under control by the Fed, and they may be successful in slowing it down. This could open up opportunities for them to loosen their monetary policy.

The U.S. has many metrics that measure inflation, including the Consumer Price Index and Personal Consumption Expenditures. When it published an 8.5% figure for July 2022, the former indicated that inflation was decreasing at the beginning of August.

While expectations had been set for a CPI reading above 9.9%, positive results led Bitcoin to rise and a general relief rally in the cryptocurrency market. The U.S. has now published PCE metrics. They were 0.1% higher than market expectations.

Analyst Caleb Franzen provides insight on this metric as well as the possibility of supporting a new rally. said:

The July PCE data confirms exactly what we saw in the CPI & PPI data. This will likely give the market more reason to celebrate, which is why we’re seeing Bitcoin back over $21,800 after dipping below $21,150 prior to the report. Expect tech & high beta to perform well.

Bitcoin to Break the $22,000 Barrier

All eyes will be on Jerome Powell, the U.S. Fed chairman and his speech at Jackson Hole. The market participants appear to have taken long positions because they perceive Powell as dovish and less aggressive in his desire to lower inflation.

To give bulls a compelling opportunity to change momentum, Bitcoin needs to break through critical resistance at $22,000 Justin Bennett, analyst, remains cautious regarding bullish continuation in the medium-term.

Bennett mentioned in an update market that it is possible for the cryptocurrency market to trade sideways the next two year. Bennett has more to say about this scenario. said:

I’m not trying to forecast exactly what will happen. I don’t know what will happen (nobody does), and there are far too many variables to count, much less forecast. But don’t assume this crypto bear market is like any other. The last bull market certainly wasn’t.

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