Crypto markets are set to face their biggest test of 2022 this week, according to analyst Justin Bennett – here’s why
Financial analyst Justin Bennett says the inflation data coming out this week will be the biggest test of the year so far for crypto markets.
In a new video, update, the popular trader says that Consumer Price Index (CPI) and Producer Price Index (PPI) data could rattle the macro environment and significantly impact crypto.
“We don’t just have CPI or PPI, but we have both back-to-back next week, so these events are going to be the ones to watch out for not only for the stock market, but also for the crypto market…
CPI and PPI are going to give us an idea of what kind of inflation we are looking at right now in the economy. Obviously, inflation is a big issue right now because it dictates how quickly the Fed and other central banks raise interest rates. The faster and more aggressively these central banks raise interest rates, the more pressure it puts on the economy and financial markets as a whole.
That includes crypto. Obviously, Bitcoin has followed the S&P 500, so the financial markets as a whole will be watching both of these events next week.
That’s what the analyst says Bitcoin (BTC) needs to see a daily close above $23,000 level to turn this area back to support. At the time of writing, BTC is trading at $23,950.
“If we see that, $23,450 is going to be next. You can see where the market is so far, struggling to get above that today. In fact, today’s high so far is $23,476, that’s no coincidence. Again, $23,450 is the resistance level to watch.
If next week’s inflation data comes out lower than forecast or it’s expected or higher than forecast but the market goes up, what I’m going to look for from Bitcoin and the way I’m going to trade is if we get a daily close above $23,000, then I will consider offering it as new support. Same with $23,450.
Very simple: If the market can close above $23,000, $23,000 becomes support. If we close above $23,450, that level will become support.
The key resistance above that is going to be right around $24,200, that’s obviously a big hurdle here for Bitcoin and one to watch if we get that break higher.
If the market can really start to rise next month into the rest of August, one level to keep an eye on here would be between $25,000. I’ve talked about this before, but the mid-$25,000 is going to be an area to watch .”
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