Bitcoin price is back in the green and rising above support at $30,000 toward the end of the Asian session on Tuesday. The pioneer cryptocurrency had slipped slightly below $30,000 and traded a July low at $29,705 over the weekend, but bulls swept through fresh liquidity, adding credence to the bullish momentum.
After 24 hours of an intense tug-of-war between the bulls and bears for dominance at $30,000, BTC is up 1.1% to $30,500. Bitcoin boasts $592 billion in market capitalization and $15 billion in trading volume, according to price data by CoinGecko.
Various jobs reports over the last week kept Bitcoin and crypto generally depressed. Market participants are now waiting to see how the bellwether crypto will react to Wednesday’s release of the United States June Consumer Price Index (CPI) along with the Producer Price Index (PPI) coming out on Thursday.
Investors are anticipating declines in the inflation data, which has sustained a downtrend since May. The same declines will validate the Federal Reserve’s decision to pause interest rate hikes, temporarily applying brakes on its intent to hike interest rates by 25 basis points (bps).
While the tight monetary policy has helped reduce the CPI from 9% posted in August to 4%, according to May’s report, economists fear that a little too much pressure could topple the US into a severe recession.
Market watchers are looking forward to a CPI drop to the 3% range in June, with some, like the senior market analyst at Oanda, a forex market maker, Edward Moya, coming out overly bullish with a projection of 2.8%.
Crypto investors, on the other hand, would be routing for a significant drop in the CPI index, as it will justify the Fed’s decision to keep halting interest rate hikes. Risk markets like Bitcoin and stocks depend on inflation going down to keep investors’ risk appetite higher.
A raft of jobs reports from last week limited price movements in the crypto market, with Bitcoin price consolidating between $30,000 and $31,000. This sluggish price action brought into the picture a double-top pattern, which bulls must fight at all costs to keep the uptrend intact. Otherwise, BTC risks plunging to $25,000 with the possibility of sweeping through much lower liquidity at $20,000.
A double-top pattern shows a possible reversal of an uptrend. It forms when Bitcoin price reaches a high point, falls back, and then rises again to the same or nearly the same level, forming two peaks.
Traders would be looking for confirmation when the price breaks below the support level that connects the lows between the peaks ($30,000), signaling that the buyers have lost momentum and the sellers have taken over.
The double-top pattern helps to identify potential exit points for their long positions or entry points for short positions. Traders may also use indicators such as volume, moving averages, or oscillators to confirm the pattern and gauge the strength of the reversal.
That said, the Moving Average Convergence Divergence (MACD) indicator dons a sell signal on the same daily chart. Subsequently, the Relative Strength Index (RSI) reveals that bears may have a significant influence on Bitcoin price, especially if the U.S. CPI data does not drop as anticipated.
If bulls push through the double-top pattern resistance at $32,000, bolstered by positive inflation data, investor risk appetite for Bitcoin and crypto may soar, with BTC triggering a rally to $35,000 and $38,000.
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