Inflation, crisis, war, FTX… all this negatively affects the crypto market. Bitcoin, among the hardest hit, has already lost 25% in value this week. As the media focuses more on Bankman-Fried, it looks like BTC holders are also losing millions. When will the next bullish phase take place? Probably not this week. But the bulls still reacted after the publication of the CPI just now.
Bitcoin (BTC) lost 25% this week
The king of cryptos is among the most affected by the situation on the FTX crypto exchange. Indeed, bitcoin, which lost 25% over the past weekend, continued to plunge this week. Since Monday, the BTC has been chaining red days which benefit the bears. With this fall, Bitcoin broke through several relevant support levels. The first was at $18,967. After breaking this level down, BTC fell all the way to $17,689. In a matter of days, bitcoin’s total market capitalization this week went from $408 billion to $301 billion.
A difficult situation for the bulls and the hodlers, but “rewarding” for the bears. Indeed, a short position opened at Monday’s opening price would have yielded a 25% gain. In other words, if a cypto trader bet $10,000, he would have pocketed $2,500 in profit. If bitcoin continues its plunge, further selling opportunities will arise for the benefit of the sellers. At this rate, we could even see bitcoin at $13,000 within a few weeks.
8% jump after the CPI
After the CPI release, the bulls fight back, leading BTC into an 8.5% rally. Indeed, the consumer price index rose to 7.7%. Which is slower compared to economists’ forecasts. As a result, most major assets pegged to dollars have exploded higher. Gold gains, S&P 500, Euro and BTC gain 2.5%, 3.7%, 2% and 8% respectively. The consumer price report is then the only bullish catalyst for bitcoin this week.
However, this rise could be more of a correction than a bull-run. Indeed, if the scenario described in our previous article is confirmed, we can consider bitcoin at $12,300 within a few weeks. But above all, we will have to wait for the price to end the current correction phase.
For this, it will be necessary to monitor the $18,260-$18,470 zone which could act as resistance. From there, sellers can take advantage of the bear market to open short positions.
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