The Bitcoin market has recently shown a noticeable resilienceinvestors betting on the rise successfully holding the price above the crucial $27,000 support level.
This development has sparked renewed curiosity and speculation among investors, traders and analysts, leading to the inevitable question: what is the next price target for bitcoin?
As we map the current Bitcoin landscape and forecast its potential trajectory, this article aims to provide insight into possible next steps for the world’s largest cryptocurrency.
The annual inflation rate in the United States drops to 4.9% in April, below the expected figure
As the Bureau of Labor Statistics (BLS) revealed on Wednesday, the US annual inflation rateaccording to the consumer price index (CPI), slowed to 4.9% in April from 5.0% in Marchbelow economists’ forecasts of 5%.
Immediately after this announcement, the price of Bitcoin (BTC) saw a rise of more than 1%, slightly above the $28,000 mark.
For the month of April, the CPI remained stable at 0.4%, in line with the consensus estimate and showing an increase from the 0.1% recorded in March.
Fed plans to suspend rate hikes amid deteriorating banking conditions
At its last meeting in early May, the Federal Open Market Committee (FOMC) of the US Federal Reserve has hinted at a potential pause in its historic cycle of rate hikes.
The central bank has raised the key federal funds rate since early 2022, reaching its current target range of 5.0% to 5.25%.
The Fed is closely monitoring deteriorating conditions in the US banking sectorwhich led to the bankruptcy of several institutions, including the latest, the First Republic Bank, despite the rapid pace of rate hikes which failed to bring inflation back to its 2% target.
Slight drop in inflation prompts speculation of monetary policy easing
Market participants believe that the slight drop in inflation observed this morning could prompt the Fed to ease its monetary policy.
As a result, US ten-year Treasury yields fell 0.58% to 3.416.
Bitcoin’s volatility on Wednesday highlights its dual nature of fragility and resilience
Bitcoin and Ethereum have experienced a appreciation of their value following slightly positive inflation data, then fell due to speculation that the US government was dumping its BTC holdingsand then, they finally rose again as investors shrugged off the turmoil.
Initially, Bitcoin and Ethereum surged in response to encouraging US inflation numbers.
However, following online rumors that the US government is divesting $277 million worth of Bitcoin (about 9800 BTC), the value of the leading cryptocurrency by market capitalization fell.
Nonetheless, Bitcoin rebounded as investors managed to regain their composure.
The fluctuating price trajectory was nothing less than a reflection of the lingering macroeconomic concerns and uncertainties within the cryptocurrency market.
Throughout the spring, Investor caution prevailed as they searched for triggers that could propel Bitcoin’s price past its current $25,000-$30,000 range.
When such catalysts will emerge, however, remains uncertain. In the meantime, Bitcoin seems susceptible to minor, isolated incidents and subtle shifts in market trend.
However, the rebound of this Wednesday also offered the latest proof of Bitcoin’s inherent resilience.
The price of bitcoin
Bitcoin hovering around the $27,500 mark. It saw a significant rally, reaching the $28,250 level, but failed to hold it and fell sharply to $26,800.
Nonetheless, this dip was temporary as Bitcoin rebounded and is now hovering in a narrow band between the $27,327 and $28,800 marks, trading this morning at $27,430 and having sold 0.75% in 24 hours.
Technical indicators present a mixed picture, Bitcoin price fluctuating both above and below the 50-day exponential moving averagewhich is currently serving as a resistance level around the $27,550 mark.
Likewise, RSI and MACD indicators are in both a buy and sell zone (the RSI is below 50 while the MACD is above 0), which means a lack of clarity among investors about the direction of the market.
If Bitcoin were to break below $27,300, it could potentially drop to the $26,900 or $26,500 levels.
Conversely, if Bitcoin manages to maintain its position above the $27,300 level, it could potentially reach the levels of $27,800 or $28,250 by the end of the day or tomorrow.
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Disclaimer: This linked article presents the views of crypto industry players and is not part of the editorial content of Cryptonews.com.
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