Bitcoin (BTC) started rising sharply yesterday afternoon as US inflation figures turned out lower than expected. As a result, the fear decreased considerably and the fear of missing out (FOMO) please. Bitcoin then rose to its highest price in more than eight weeks.
Bitcoin Fear and Greed Index is 41 — Neutral
Current price: $23,941 pic.twitter.com/U4UL6vO0ln— Bitcoin Fear and Greed Index (@BitcoinFear) August 11, 2022
Bitcoin price rises by 7.3%
The bitcoin price was initially falling this week. The market became a lot more anxious and more bearish in anticipation of the US consumer price index (CPI). Bitcoin fell back to $22,800 on Tuesday night.
Bitcoin then started to climb cautiously in the run-up to the CPI. When the inflation figures were published, the BTC price immediately made a huge jump. The price shot to $24,200 from $23,115, up nearly 5% in less than an hour.
The $24,000 first caused quite a bit of resistance and bitcoin dipped briefly to $23,550 last night. Then bitcoin jumped again and the price was finally able to break through $24,000.
At the time of writing, the BTC price is already at $24,600 on Binance and $23,800 on Bitvavo. This means that BTC is up 7.3% today.
CPI causes bitcoin short squeeze
The US CPI was released yesterday afternoon and came in at 8.5% YoY. That was lower than the expected 8.7%, easing pressure and fear in the riskier asset markets. Keep in mind that an inflation rate of 8.5% is still very high.
Inflation in July came at 8.5%. That’s better than the median month on month inflation drop.
Still, in terms of absolute level this is high.
Even if it dropped 0.5% every month it would take a year to get back to the 2% target… let that sink in. pic.twitter.com/isBje2zQUc
— ecoinometrics (@ecoinometrics) August 10, 2022
In yesterday’s market update, we described that sentiment bearish was made in the run-up to the CPI. The so-called funding rate on derivatives turned negative. However, that could also lead to a short squeeze and that is exactly what happened. Analyst On-Chain College reports that the price increase was accompanied by a liquidation of as much as $32 million in short positions in the two hours after the CPI news.
About $32 million in #Bitcoin Short Liquidations in the 2 hours following the CPI news… pic.twitter.com/YtyvkyAFti
— OnChain College (@OnChainCollege) August 10, 2022
After CPI, stock markets such as the S&P 500 and Nasdaq also rose sharply. Bitcoin has a very high correlation with these two markets in 2022. With the US dollar index (DXY), bitcoin has a very high negative correlation this year. The DXY price made a big plunge yesterday and if this continues, it may portend more good news for bitcoin.
$DXY is testing below the uptrend line.#Bitcoin has a shot at rebounding up more if this $DXY dip continues. pic.twitter.com/lfUv12EidN
— Kevin Svenson (@KevinSvenson_) August 11, 2022
Will bitcoin break out further or will the price correct?
Bitcoin has struggled to break through $24,600-$24,700 in recent hours. Analyst SmartContracter sees a possible further breakout for bitcoin if the price breaks through this level.
if #btc breaks 24.7k any corrective wxy structure from the lows is invalid in my eyes and this move up would then be bullish accumulation and a series of 1-2s
still hasn’t broken out yet but i suspect it will pic.twitter.com/5NBi0Lkmx6
— Bluntz (@SmartContracter) August 11, 2022
Nevertheless, not everyone is bullish. Analyst Il Crypto Capo sticks to its bearish forecast and still expects a rejection around $25,000-$25,500 in the coming days. Then maybe even new ones lows for bitcoin.
Almost there. https://t.co/oJFpD5BVz9 pic.twitter.com/2pjpUgw85T
— il Capo Of Crypto (@CryptoCapo_) August 11, 2022
Crypto Insiders Premium for bitcoin analytics
Do you want to receive more in-depth bitcoin analyses? Then we would like to refer you to our Discord community for members. Ask analysts questions, chat with our fanatic community and receive daily technical and fundamental analysis of bitcoin, but also other crypto. Through Discord Premium we can share knowledge with each other 24/7 and we try to stay ahead of the market together with our members.
Disclaimer: Investing involves risks. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts’ own insights and experiences and are for educational purposes only.
