Bitcoin outperforms bears as $1,800 losses turn into even stronger gains at the start of Wall Street trade
Bitcoin (BTC) fell immediately following the latest US Consumer Price Index (CPI) data on Feb. 10, in a surprise move that deflated bulls.
Data from Cointelegraph Markets Pro and TradingView tracked the BTC/USD pair as it fell $1,800 after January’s CPI hit 7.5%.
Despite being 0.2% higher than expected, rising inflation did not have the positive impact on risk assets like Bitcoin that characterized the past few months.
Given the pace of year-over-year price increases, analysts argued, the Federal Reserve may now have more impetus to start raising interest rates sooner.
Cointelegraph contributor Michaël van de Poppe asserted that “US consumer price index (CPI) results are coming in at 7.5% year over year, expectations were 7.3% year over year. DXY is skyrocketing and risky assets are falling like Bitcoin and stocks.”
Trader and analyst Scott Melker, known as the “Wolf of All Streets”, was unimpressed by the market. On Feb. 10, he posted on Twitter that he thought, “Bitcoin was supposed to go up whenever they admit that inflation is bad, but instead people dump it because they are afraid the Fed will actually try to deal with inflation.”
For economist Lyn Alden, however, the cash savers are the ones who feel the real pain with inflation. Alongside a chart, he noted that “Official inflation currently has its largest gap over short-term interest rates since 1951.”
BTC price recovers above $44,000
As soon as Wall Street trading began on February 2, Bitcoin not only reversed its losses, but it hit a higher high of nearly $45,400. BTC/USD also avoided a recent support retest, with $42,000 still less to see a retest.
Previously, Cointelegraph reported on the likely resistance zones now in play for the bulls to battle to continue higher.
“A Bitcoin uptrend in the face of macro uncertainty would be quite powerful. It changes the TradFi court narrative with BTC as a risky asset to a mere story of global adoption and ensuing game theory. I have to wonder how many macro brothers have unloaded inventory for now,” analyst William Clemente, added recently via Twitter.
Clemente has also asserted that “I can’t think of any other asset I’d want to hold during times of geopolitical uncertainty than Bitcoin.”
Market analyst Lark Davis believes that BTC has retested as it is still trading above the 50-day moving average.
Davis had previously pointed out that the price above the 50-day moving average was bullish, but its viability depended on how the US Federal Reserve’s (Fed) planned interest rate hike would play out. He mentioned that, “50 day moving average resumed for Bitcoin. The last two times we crossed this line, BTC was up 54% and up 47%. If history rhymes, then we could see BTC rallying into the 60k range in the coming weeks.” He noted on Twitter, “The last two breakouts of the 50-day moving average lasted 40 and 46 days until we saw spikes form for the price of Bitcoin. So, new high for BTC at the end of March?”
Meanwhile, market insight provider Santiment claims that “Bitcoin mega whales have accumulated significantly in the last 7 weeks. Addresses with 1,000 BTC or more added a combined 220,000 BTC to their combined wallets since December 23, the fastest accumulation we have seen since September 2019.”
By Audy Castaneda
