Bitcoin price targets range from $19K to $25K as CPI day dawns
Bitcoin (BTC) saw ongoing rejection below $22,000 until February 14 as markets braced for macroeconomic data impacts.
Bitcoin vs. CPI: “Expect Volatility”
Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD failed to expand above $21,800 ahead of the US Consumer Price Index (CPI) for January.
Already dubbed the “most important” CPI release, the data, due at 8:30 a.m. Eastern Time, is a classic volatility catalyst for risk assets.
Crypto market participants thus expected a busy trading day, with both $19,000 and $25,000 on the table as potential targets depending on how far the results stay from estimates.
“Will likely see that $24-25,000 Bitcoin pump if tomorrow’s CPI figures show more disinflation in a positive direction,” Venturefounder, a contributor at chain analytics platform CryptoQuant, wrote in part of a Twitter update.
“Conversely, negative surprise would set up a perfect retest to $19-20k BTC A very important day. Expect volatility.”
Year-on-year CPI was expected at 6.2% versus 6.4% the previous month, with the monthly reading due to rise to 0.5% from 0.1%.
“Relatively high expectations if you combine this with the previous trend,” Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight, argued on the day.
Van de Poppe was already betting on the “end stage” of Bitcoin’s current retracement, with $20,500 the key level for bulls to hold.
CPI “decisive” to determine crypto losses
Meanwhile, in its latest market update, trading firm QCP Capital flagged factors beyond the data as cause for concern for crypto investors.
Related: Bitcoin Flirts With Bid Liquidity As BTC Price Nears New 3-Week Lows
The ongoing lawsuits against blockchain firm Paxos and exchange Binance’s BUSD stablecoin, it warned, could be the tip of the iceberg when it comes to US regulatory policy.
“With the regulatory hammer still out on the industry (possibly until the 2024 election), the upside to crypto’s market value looks even more muted from that perspective now,” it wrote.
“Therefore, today’s CPI print is crucial to determine the extent of downside for crypto.”
The QCP continued that there was a mismatch between expectations and reality when it comes to the Federal Reserve cutting interest rates despite theoretically easing inflation.
“In the fixed income market, we are now pricing in a terminal rate of 5.2% followed by a 30bp cut by 23 December, a monumental step up from the 4.9% terminal and 50bp cut just 2 weeks ago,” the report highlighted.
“Risk assets have clearly not adjusted to this rise in interest rate expectations, and we expect today’s pressure to bring all markets into line – whether it’s an outsized equity sell-off (at a higher-than-expected number) or a rise in interest rates (at a lower-than-expected number ).
The Fed will not call an interest rate change meeting until the third week of March, with a new CPI printout before then.
The views, thoughts and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
