Investing.com – The cryptocurrency continues the rebound initiated from Monday’s low below $40,000, with the cryptocurrency trading at $43,500 at the time of writing, after peaking at $44,305 last night. On this peak, the was up more than 11.6% since the low at $39.677 at the start of the week.
As for Bitcoin’s gains yesterday, studying the very short-term charts shows that the cryptocurrency showed a bullish reaction to the US CPI release.
US Inflation Figures Boost Bitcoin
Indeed, although higher than the official consensus, US inflation remained below what many observers feared, which brought relief.
This reduces the market’s risk of the Fed becoming too hawkish too quickly, unlike the Fed Minutes released last week which suggested a sharp hawkish turn.
Recall that bitcoin is seen by many investors as a hedge against rapid inflation, and the price has climbed since the Fed began printing money and pursuing ultra-loose monetary policies since the coronavirus. hit in March 2020.
BTC/USD sends mixed technical signals
From a technical point of view, the daily chart of Bitcoin reveals some contradictory signals. On the positive side, Bitcoin’s rebound this week confirms the importance of the $40,000 support, and also corresponds to a rebound on a long-term uptrend line visible since October 2020, as seen on the chart below :
Regarding the importance of the $40,000 threshold, it should be noted that Jurrien Timmer, director of global macroeconomics at Fidelity Investments, yesterday called this area “pivotal support”, considering that Bitcoin is “technically oversold”.
As for the negative factors, it should be noted that a crossing of the 50-day moving average below the 200-day moving average seems imminent. However, such a cross is universally recognized as a powerful bearish signal called a “death cross”.
The last time such a crossover took place was in June 2020, and a month later Bitcoin had fallen to its 2021 low.
Additionally, there are many hurdles in the road for the cryptocurrency should the rebound continue, including a downtrend line visible from the October 2021 high, and currently located around $46,000, ahead of the 50-52,000 zone. $ which is to be considered as a major resistance whose crossing would begin to improve more significantly the profile of BTC/USD in daily data.
Investors are buying Bitcoin’s long-term bottom
Finally, it seems interesting to note that on Monday, when Bitcoin tested $40,000 and then quickly rebounded, outflows from exchanges to crypto wallets reached nearly 30,000 BTC according to CryptoQuant data, which was a peak not seen since September 10, 4 months ago.
The outflow of BTC funds from exchanges is a bullish indication, since it means that investors are withdrawing their bitcoins from the market to store them for the long term on private wallets. This thus supports the thesis that Bitcoin bottomed out on Monday, and that we should perhaps expect a return to a sustainable rise in the cryptocurrency.