Today released data on consumer inflation in the United States – it continues to decline from month to month. But why has the Bitcoin rally stalled?
The December consumer price index (CPI) was 6.5% on an annualized basis, which is fully in line with the forecast.
According to the Cryptocurrency Screener Cryptovizor, which determines the market price of BTC/USD based on the results of trading on the largest spot exchanges, the asset reacted to the publication of CPI data with volatility and, after reaching a maximum at $18,410, began to fall. At the time of publication, the rate corresponded to $18,003.
Philadelphia Federal Reserve Bank President Patrick Harker declaredthat the central bank should move to raise interest rates by 0.25% per month. “I expect that we will raise the rate a few more times this year, however, in my opinion, the days when we raised it at once by 75 basis points are over,” he said and looked thoughtfully into the distance.
Eight trading firm founder and CEO Michael van de Poppe expressed an opinionthat the decline in inflation in the United States is an excellent fuel for a rebound in the cryptocurrency market with a horizon of 2-3 months, however, a short-term correction of bitcoin should be expected in the near future.
His colleague Filbfilb gave technical rationale for this correction:
BTCUSD is now facing horizontal and horizontal resistance plus the 20 week moving average.
“Inflation has dropped and Bitcoin’s rally has stalled. What’s the matter?” the inquisitive reader will ask. And here’s the thing. Indeed, CPI continues to decline, starting in August 2022, and recently – ahead of forecasts. However, if in October the lead was 0.3%, then in November it decreased to 0.2%, and in December it completely disappeared. If the trend continues, then in January the consumer price index may be higher than expected.
Yes, this is not the end of inflation reduction, but already a clear lack of progress in this direction. So where does optimism come from in the markets?
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