Bitcoin (BTC) is eyeing key resistance near $25,000 on March 14 as the market awaits key economic data from the United States.
CPI hopes will bring Bitcoin “consolidation”.
Data from Cointelegraph Markets Pro and TradingView show BTC/USD made a monthly high of $24,917 on Bitstamp overnight.
The pair held up well after the impact of multiple US bank closures sent the crypto market skyrocketing.
For now, all eyes are temporarily on the Consumer Price Index (CPI) print for February when it comes to short-term BTC price action.
A classic catalyst of crypto volatility itself, last month’s CPI showed an unexpected drop in inflation, which will fuel fears that the Federal Reserve will keep interest rates on hold for longer.
Risky assets did not have time to worry, however, as the banking crisis overshadowed the inflation debate. On that day, expectations had pointed to the Fed ignoring rate hikes altogether – regardless of CPI trends.
“Bitcoin sweeps to the top here as it tests high at $25K,” Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading company Eight, toward Twitter followers.
“You’d better see a few periods of consolidation (today’s CPI day) before moving on. If the market sweeps high at $25.2K, make a bear. div and pull back, I’ll look for shorts to $23K.”
On-chain monitoring the source of Material Indicators pointed to a potential shake-up in the composition of the book so thanks to the CPI.
If the data exceeds expectations, the bid support could be “carpeted”, it warned, paving the way for a deeper BTC price correction.
“Asia can continue to eat ask liquidity and clear the path to volatility before the CPI Report,” it comments about moving on the BTC/USD pair on Binance.
“If the CPI is hot, I expect support for the carpet. If it’s cold, and the other banks don’t come down before lunch, the bigger ones are short.”
The accompanying chart from co-founder Keith Alan shows $23,600 and $25,000 as the main areas of bid and ask liquidity.
The Material Indicator is added that in order for the Bitcoin rally as a whole to have legs, it must post weekly closing times above its 200-week moving average (WMA).
“It needs a full candle above the 200 WMA to consider a breakout,” he confirmed.
CPI: “Maufactured” or “in some solid form”?
A lower-than-expected CPI reading will boost the case for the Fed to rule out further rate hikes and ease financial conditions.
Related: Fed begins ‘stealth QE’ – 5 things to know in Bitcoin this week
For his part, US President Joe Biden last week seemed unconcerned that inflation was on the right track, even before the banking crisis erupted.
At a White House press conference, Biden said he was “optimistic that we’re going to get — the CPI next week. Hopefully, we’re going to come in — in solid shape.”
But among analysts, there is suspicion. A surprise drop in the CPI will be most beneficial for the Fed which is currently supported by recent events, popular trader xTrends suggested.
“I believe tomorrow the CPI will be produced to prevent a market crash, and it will be quietly revised over the next few weeks as it has been in the last few CPI numbers,” he revealed in the comments section of Twitter.
A clearer macro warning came from Cathie Wood, CEO of ARK Invest, who issued a gloomy forecast for the consequences of further rate hikes.
In dedicated Twitter thread on March 13, Wood, in which ARK Leadership continues to increase exposure to crypto, called for the Fed to “pivot” in rates.
“If the Fed continues to focus on lagging indicators like the CPI, and does not pivot in response to the deflationary forces telegraphed by the inverted yield curve, then this crisis will damage regional banks and further centralize, if not nationalize, the US banking system,” he wrote.
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