Bitcoin (BTC) wobbled at $18,000 at the January 12 Wall Street open even as United States inflation continued to decline.
Bitcoin traders remain cautious post-CPI
Data from Cointelegraph Markets Pro and TradingView show BTC/USD is experiencing predictable volatility following the release of Consumer Price Index (CPI) data for December.
The first release of 2023, the event preceded the start of trading on Wall Street, with Bitcoin briefly gapping higher before returning to threaten damage below the $18,000 mark.
In doing so, the largest cryptocurrency copied the behavior of one month before, with resistance at $18,500 still untested.
CPI came in at 6.5% year-on-year, in line with the majority of predictions. According to CME Group’s FedWatch Tool, markets are betting on a smaller 0.25% interest rate hike from the Federal Reserve at the February meeting of the Federal Open Market Committee (FOMC).
For traders, it’s still a case of “wait and see” despite the downward trend in US inflation.
“Not every pump means the bottom is there and the reversal has happened,” popular trader and analyst Crypto Tony be careful as part of a Twitter update.
“We entered a bull market when we saw higher highs and lower lows in Bitcoin that haven’t been there yet.”
Michaël van de Poppe, founder and CEO of trading company Eight, also suggested that Bitcoin could see a temporary decline before joining the recovery of more risk assets on the back of the CPI data.
“Another month in which inflation decreased, it is now lower than November 2021. Every month even shows a negative figure,” he said. tweeted.
“Fuel for a relief period of 2-4 months for the market, but probably a short-term correction soon for Bitcoin.”
A subsequent post strengthened the possible downside is “probably” setting for BTC/USD, potentially towards $17,700.
“Sticky” inflation sees stocks open flat
Meanwhile, stocks, which had priced in the CPI results, remained muted in the opening hours.
Related: 13% of BTC sources profit as Bitcoin sees ‘massive’ accumulation
At the time of writing, the S&P 500 and Nasdaq Composite Index were both 0.2% higher on the day.
Popular analytics account Tedtalksmacro noted that core inflation remains “sticky,” this has the potential to dampen sentiment despite the overall trend.
“The clear trend is that inflation has been contained + we still haven’t seen the impact of food increases,” he said. along.
“I don’t have an edge in trading this chop, but where I do have an edge is looking at trends in early data… dips to buy in Q1 + Q2, shorts -EV for me in this environment.”
Crypto markets were kept liquidations of shorts in check on the day, Bitcoin removed $33 million positions on January 12, along with $21 million longs, data from Coinglass shows.
The views, thoughts and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.