As we dive into Bitcoin price predictions, the upcoming report on the consumer price index (CPI) looms large, raising questions about its potential impact on the cryptocurrency market.
This key economic indicator has historically influenced market trends, but what can we specifically anticipate for bitcoin in this scenario ?
This Bitcoin price prediction will explore the potential outcomes and how they could shape the price trajectory of Bitcoin in the near future.
Focus on the underlying inflation rate in the United States
The consumer price index (CPI) shows a 5.0% year-over-year increase consumer price inflation in the United States in March 2023, at a seasonally adjusted annual rate of 301.836.
The market had anticipated higher growth of 5.2%which would have led to 302,254 points, indicating that this drop was globally expected.
At present, headline inflation has been declining for nine consecutive months and is currently at its lowest level since May 2021. Lower energy costs are the main contributor to lower prices.
The underlying inflation rate in the United States, which excludes food and energy price volatilityis the main focus of economists, policy makers and investors.
The underlying inflation rate is taken as a better indicator of long-term price trendsand a significant deviation from expectations could potentially impact financial markets, including cryptocurrencies such as Bitcoin.
What is the impact of the US price index on the Bitcoin and cryptocurrency market?
The core inflation rate in the United States has a significant impact on the price of Bitcoin. If the inflation rate is higher than expectedthis usually results in a stronger US dollar, which exerts a downward pressure on the value of Bitcoin.
Conversely, if the inflation rate is lower than expected, it may weaken the U.S. dollar, which may result in a Bitcoin price increase.
As a result, many investors and traders closely monitor the release of the Price Index report as it can significantly influence their trading and investment decisions.
The price of bitcoin
Bitcoin is currently trading at $27,600 with a trading volume of $13.8 billion in the last 24 hours.
CoinMarketCap still ranks it number one among cryptos with a total market capitalization of $536 billion.
However, Bitcoin is struggling to break through the important resistance which sits at $27,700suggesting that a clear downtrend could take over as investors betting on the upside struggle to cross the threshold.
Nevertheless, Bitcoin’s trading range remains between $27,250 and $27,700.
But other information is to be taken into account!
Today, US inflation data is expected to be released, which could lead to an exit from this range.
A strong US dollar usually leads to lower Bitcoin priceswhile weaker numbers from the US Price Index indicate a struggling US economy, pushing Bitcoin prices higher.
SO, if Bitcoin can break through the $27,700 levelhe has a chance to reach $28,050 or even $28,650. However, if Bitcoin stays below $27,700, investors may consider trimming bitcoin positions with sell targets at $27,450 and $27,150. So we have to cross our fingers that the news is positive!
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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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