Bitcoin pulls back to $23K as traders await tomorrow’s CPI print
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(Kitco News) – Global financial markets experienced a decline in prices on Tuesday as investors took a step back from trading ahead of tomorrow’s Consumer Price Index (CPI) report.
The details in the report will help provide insight into whether the Federal Reserve’s aggressive rate hikes have so far had any effect on rising inflation and may affect the size of future increases going forward.
Derisking activity by crypto traders resulted in a pullback in the price of Bitcoin to a daily low of $22,876 as bullish reinforcements arrived to bid back above the $23,000 support.
BTC/USD 4-hour chart. Source: TradingView
Ethereum, similarly, saw its value plunge 8% off Monday’s highs to hit a daily low of $1,669 before dip buyers were able to push the price back near support at $1,700.
ETH/USD 4-hour chart. Source: TradingView
As it stands now, the consensus from analysts across the markets is that July’s data will be lower than the record 9.1% figure seen in June, but it is still projected to be well above the historical average, as well as the Fed’s stated. target of 2%.
Derisking before the CPI printout
The fear that inspired Tuesday’s pullback across the crypto market was addressed by independent market analyst Michaël van de Poppe, who posted the following Tweet detailing key support and resistance levels to keep an eye on.
We will, #Bitcoin consolidating here and I hear the craziest numbers flying around.
The trend is still upward, potentially a correction is now taking place due to CPI fears.
Important:
▫️ Hold above $21.3K to continue the trend.
▫️ Break above $24.5K to continue to $28K. pic.twitter.com/PVG3RDOrjg— Michaël van de Poppe (@CryptoMichNL) 9 August 2022
A follow-up Tweet from Poppe noted that “the trend is still up” despite the current correction and identified $21,300 as the level that needs to be held to continue the trend.
Overall, the consensus across crypto-Twitter appears to be that the current pullback is a result of bearish behavior ahead of the CPI print, with analysts suggesting the outlook will become clearer once the report is released on Wednesday.
Just a slight reduction in risk from traders awaiting this week’s CPI print. Up or down who knows, but some traders seem to be interpreting recent statements from the Fed + post-CPI print market results as a sign that they have gone “dove”. Still fluctuating spot longs personally.
— Big Smokey (@big_smokey1) 9 August 2022
Altcoins are trending lower
Relatively few tokens in the top 200 were shielded from Tuesday’s pullback as crypto traders fled to the safety of stablecoins awaiting an update from the Fed.
Daily performance in the cryptocurrency market. Source: Coin360
Top performers of the day included Spell (SPELL), which climbed 32% to a daily high of $0.00159, followed by Celsius (CEL) with a gain of 18% and Reserve Rights (RSR) with a gain of 8, 3%.
The total cryptocurrency market cap is now $1.088 trillion, and Bitcoin’s dominance rate is 40.5%.
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