Bitcoin’s price was still above $83,000 on October 14. Traders were focused on the US consumer price index, or CPI, that is set to be released on Wednesday. Prices rose 3.4% a year in August. The forecast for September is 3.7%. The reading will be the final one prior to the Fed’s Oct. 28 meeting. This is the reason that markets from Sydney to New York have fallen silent.
Inflation data is important because it influences expectations of the interest rate. A lower-than-anticipated number may help alleviate the biggest worry in the market in one morning. Bitcoin.com News put the whole crypto market at $2.79 trillion. What an excess of value in one number! US CPI could then affect the price of Bitcoin within hours.
Bitcoin lost 3.2% last week, according to Cointelegraph. However, purchasers continued to back up the $83,000 price point. The coin now trades at $83,354. Still above levels buyers protected all weekend. Markets tend to shift the most immediately following a large data day, after the speculation subsides.
Bitcoin traded at $83,354 as markets awaited the US CPI report. [Binance]
Three Signals Bitcoin Traders Are Watching
As closely as the traders read the charts, they read the news headlines. These three signals have outshone the data release:
- Signal One: The $83,000 Support Line. This was defended all weekend by buyers. Rekt Capital states that once the weekly price closes above $83,000, it is considered to have retested. That would give the buyers some say.
- Signal Two: The $81,300 Floor. Bitfinex has suggested that $81,300 is the price at which it wishes to hold its token. Anything less would instil a brief lack of confidence. If CPI is hot, traders will keep an eye on this line.
- Signal Three: October is a Seasonal Record. Bitcoin Magazine points out October has averaged 8 out of 10 years with positive price action. There is no certainty in History. Nevertheless, it brings some ambience to the market.
Bitcoin Price Prediction: What Could Happen After the CPI?
If the CPI reading is low, then Bitcoin will be the major story in crypto. Still, there is a limit to the upside due to size.
A strong month would result in an increase of only $1.67 trillion. This Bitcoin price forecast is thus not an aggressive one. If there is a higher reading, it could bring the $81,300 floor back to the fore.
Traders would then wait to see if $83,000 is again defended by buyers. If it’s able to close above that point on the weekly chart, it would confirm the bull market.
Why Ethereum Whales Matter for Bitcoin Sentiment
Buyers have been waiting a long time for the report, but it is not the big guys. On October 11, CoinCentral reported that whales deposited over 166,000 ETH over the course of 72 hours.
According to the report, Ali Charts is the source. Ethereum support sits at $2,450 to $2,500. Resistance sits at $2,650 to $2,750.
If they were able to get rid of that band, it would be approximately 9% more. It is imperative to monitor whale buying as the overall market sentiment can be influenced by it.
When and How to Follow the Data
The CPI report is released on Wednesday, with a Fed meeting scheduled for October 28. Traders can now use it to compare the headline figure with the 3.7% forecast.
If it is lower than that, it can be beneficial for risk assets. If the reading is higher, it could put pressure on prices. Watch the $83,000 and $81,300 levels as the numbers arrive.
Don’t forget about the weekly close, either. After a big inflation release, markets always seem to have a tendency to get rowdy.
Also Read: Bitcoin Selloff Tests Key Support as $394 Million in Crypto Positions Are Liquidated
FAQs
Q1: What is CPI and How does it affect Bitcoin?
A1: The inflation rate, measured by CPI, has been increasing, up by 3.4% a year in August. The forecast for September is 3.7%, which affects expectations of the Fed’s rates.
Q2: where is Bitcoin trading at this moment?
A2: Bitcoin trades at $83,354, above the $83,000 support line. Bitfinex has set the floor value at $81,300.
Q3: What is the next date for the Feds meeting?
A3: The Fed’s next meeting is on October 28. This is the first significant policy move since the CPI was released on Wednesday.
Q4: Where do the vast quantities of Ethereum whales stand?
A4: In 72 hours, whales added over 166,000 ETH. Support sits at $2,450 to $2,500, with resistance at $2,650 to $2,750.
Disclaimer:
This article provides general information only and is not financial advice. Bitcoin prices tend to tumble around in response to releases of the US CPI, and estimates like 3.7% for September could be incorrect. Support levels like $83,000 and $81,300 offer no guarantee. Please read and perform your own due diligence and seek advice from a licensed financial adviser in Australia before investing or trading digital assets.
