Bitcoin price nears $25,000 as analysts bet on CPI impact

Bitcoin (BTC) saw key resistance near $25,000 on March 14 as markets awaited key economic data from the US.

Hope CPI Will Bring Bitcoin “Consolidation”

Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD made monthly highs of $24,917 on Bitstamp overnight.

The pair held up after the impact of several US bank closures sent crypto markets soaring.

Now, all eyes were temporarily on the Consumer Price Index (CPI) for February in terms of short-term BTC price action.

A classic crypto-volatility catalyst in its own right, the CPI last month showed an unwelcome drop in inflation that eased, again fueling fears that the Federal Reserve would keep interest rates higher for longer.

Risky assets had little time to worry, however, as the banking crisis later overshadowed the inflation debate. On the day, expectations already pointed to the Fed abandoning interest rate increases altogether – regardless of CPI trends.

“Bitcoin is sweeping the tops here as it has a test range of $25K,” Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight, told Twitter followers.

“You would prefer to see a period of consolidation (KPI day today) before proceeding. If the markets extend high at $25.2K, make a bear. div and fall back, I’ll look for $23K shorts.”

On-chain monitoring resource Material indicators pointed to a potential shake-up in order book composition thanks to the CPI.

Should the data beat expectations, bid support could “incubate,” it warned, opening the way for a deeper BTC price correction.

“Asia may continue to eat up asking liquidity and clear a path for volatility ahead of the CPI report,” it commented about moves on the BTC/USD pair on Binance.

“If the CPI is high, I expect support to sizzle. If it’s cold, and another bank doesn’t go under before lunch, a bigger short squeeze.”

An accompanying chart from co-founder Keith Alan showed $23,600 and $25,000 as the most important areas for bid and sell liquidity, respectively.

Material indicators added that for Bitcoin’s overall rally to have legs, it needs to deliver several weekly bars above its 200-week moving average (WMA).

“Needs full candles above 200 WMA to consider a breakout,” it confirmed.

KPI: “Produced” or “in some solid form”?

Lower than expected CPI readings will increase the case for the Fed to reduce further interest rate increases and loosen economic conditions.

Related: Fed Starts ‘Stealth QE’ – 5 Things to Know in Bitcoin This Week

For his part, US President Joe Biden last week appeared to have no concerns that inflation was on track, even before the banking crisis fully erupted.

At a White House news conference, Biden said he was “optimistic that we’re going to get — CPI next week. Hopefully we’ll be in — in solid shape.”

Among analysts, however, there were suspicions. A surprise drop in the CPI would be most helpful for a Fed currently backed into a corner by recent events, popular trader xTrends suggested.

“I think tomorrow’s CPI will be produced to prevent a market crash and it will be quietly revised weeks later like they did with the last CPI numbers,” he revealed in part of the Twitter commentary.

A stronger macro warning, meanwhile, came from Cathie Wood, CEO of ARK Invest, who gave a gloomy forecast for the consequences of any further rate hikes.

In a dedicated Twitter thread On March 13, Wood, under whose leadership ARK continues to increase crypto exposure, called for a “pivot” from the Fed on interest 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, this crisis will gobble up more regional banks and further centralize, if not nationalize, the US banking system,” she wrote .