Bitcoin Shakes Off Bears Following CPI Release, But Will This last?

After the CPI data was released, Bitcoin experienced a volatile day. The projections of the inflation rates were very high but they came out to be lower than actual numbers. This was why the market reaction in Bitcoin was negative. Although Bitcoin was below $19,000 during the crash, there had been some recovery towards the end. It remains to be seen if Bitcoin would hold onto these gains.

Bitcoin: Can it Keep up?

The bitcoin price has increased more than 6 percent in the past 24 hours to close to $20,000, which is the resistance level. The resistance at the junction of bears and indicators points to bitcoin being in a difficult spot. This makes it hard for bitcoin to surpass this point.

Fuad Fatullaev is the CEO and Co-Founder of Web3 ecosystem WeWay. He explained that it was well known for bitcoin to respond to CPI data releases in this manner. Since there are no signs of slowing inflation in the future, institutional and retail investors have been wary about getting in on the market. 

The Fed will increase its policy because it is probable that inflation will remain high above 8%. It will result in a poor market environment that is favorable for risk assets like bitcoin. This will lead to a collapse of the wider market, which in turn will bring down the cryptocurrency market.

Bitcoin price chart from

BTC rebounds at $19,600| Source: BTCUSD on

“Unfortunately, the market is still billed to face a significant headwind as inflation is still likely to remain above 8% and this will not deter the FOMC from maintaining its hawkish stance,” Fatullaev told NewsBTC. Fatullaev stated that the price recovery does not necessarily mean bitcoin will not experience more downside. 

“It is not yet free from any further negative downswing. As such, more intense negative selling pressure that may be ushered in will definitely depress the price of the asset some more and investors will rather want to stay on the sidelines and will be targeting a perfect entry point after the volatility introduced by the inflation report has subsided.”

Bitcoin needs to surpass its 50 day moving average in order to create a new bull trend. But, it will be difficult to do so because of the resistance at $20,000 The accumulation trend, if it continues, will give Bitcoin the needed momentum.

Featured image taken from Investor's Business Daily chart on

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