There is very little movement in the crypto market since yesterday. This is probably the calm before the storm. Indeed, the US inflation rate today will likely cause much more volatility in bitcoin (BTC).
Situation of bitcoin (BTC) against the dollar
On the monthly scale, we can see that the dollar index is currently facing a major support. This is the high of 2016, around 102 USD. However, a drop in the inflation rate could weaken the dollar. Thus, if this support breaks, we can see a drop in the dollar below 100 USD. However, this drop in inflation will be favorable for bitcoin (BTC) which is starting to show bullish signals. On this scale, it can be seen that the price of BTC has rebounded after brushing the area below $18,000. This is the 78.6% level of the range between the COVID low ($3916) and the all-time high ($69200). Currently, the price is approaching $25,000, a critical resistance.
On the daily scale, it can be seen that bitcoin (BTC) is currently trading near the November 2022 high. However, this level could break as the buyers start to weaken. Indeed, the RSI begins to cross below 50. We could thus envisage a drop in the price towards $18,192. However, this will likely just be a correction, as the fear & greed index begins to move above 50. In this case, bitcoin (BTC) could be seen below $18,192, before resuming the early rally. ‘year.
A drop below $20,000?
If the inflation rate is lower than expected, the dollar should weaken. Which will drive bitcoin (BTC) higher given the negative correlation between the two. In this case, BTC could retrace to the $23288 level which aligns with the 50% fib level of range $22300 and $24267. However, the structure over the medium term seems to indicate that the correction could drive the price of BTC below $20,000. In this case, a short position seems more interesting than buying.
We are considering a scenario where bitcoin (BTC) makes the high of the week today. So, if the price goes all the way up to $23288 with the CPI, it will be an interesting time to sell.
Entry point: $23,288
Stop: $24,300
Goal 1: $20,000
Goal 2: $18,192
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