Bitcoin price continues to hover above $30,000 as consolidation heats up across the crypto market. On the other hand, investors are anxiously waiting for the release of the US Consumer Price Index (CPI) – the respected inflation indicator. This index will guide the Federal Reserve on the next course of action, especially after halting interest rate hikes in early June.
Analysts are significantly conflicted on how Bitcoin price will react to the CPI data expected on Wednesday. Market expectations are in the 3% range, which may suggest further easing of inflation in the US and possibly a continued pause on interest rate hikes.
Risk assets like Bitcoin benefit a lot from easing inflation which encourages investors to seek more exposure to Bitcoin, crypto, and stocks. Meanwhile, support at $30,000 puts Bitcoin in a delicate situation where declines to $28,000 and $25,000 cannot be ruled out.
On the other hand, BTC could still be poised for an upswing, especially with accumulation on the rise.
From a micro perspective, Bitcoin price is trading within a bullish rectangle pattern. This chart formation implies a pause in the uptrend and allows for consolidation ahead of the next bullish breakout.
A break above the rectangle resistance (upper boundary) at $31,374 would mark the beginning of the breakout. Traders validate this with a sudden spike in volume and sustained movements above the resistance.
Here, investors look out for a breakout target equal to the width of the pattern and extrapolate above the upper boundary. In this case, traders with long positions in BTC would be eyeing a 5% move to $33,000.
The rectangle pattern, coupled with a bullish signal from the Money Flow Index (MFI), adds credibility to the potential breakout to $33,000. The MFI is climbing again after dropping from the overbought region above 80 to 35. This indicator shows the strength of both the inflow and outflow of money in BTC markets.
The crypto market has greatly improved from 2022 doldrums with the next bull market, according to Tim Frost, the CEO of Yield App, a digital wealth management platform likely to kickoff “in 2024 following a period of continued consolidation this year and, behind close doors, huge innovation is paving the way for the next wave of crypto adoption.”
Glassnode, in a recent report on bull market corrections, said that “the peak drawdown in 2023 has been just -18%, which is remarkably shallow compared to all prior cycles.” The on-chain analytics platform attributed this technical outlook to “a relatively strong degree of demand which underlies the asset (BTC).”
A deep examination of the market data indicated that despite the unpredictability and changes observed thus far, Bitcoin is still showing vivid signs of recovery and remains strong in the ongoing cycle.
Crypto analyst JD told his 28k followers on Twitter that a Bitcoin bull market confirmation is coming and could trigger an altcoin season. He anticipates the confirmation signal over the next month “when the MACD has the confirmed bullish cross & stochastic RSI crosses above the 80 level.”
For now, support at $30,000 remains critical to Bitcoin price, with the possibility of a spike first to $33,000. On the other hand, declines below the immediate support may result in losses to $28,000 before another bullish breakout.
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