The market is bracing for volatility over the next 36 hours as Bitcoin is at a turning point both technically and economically.
Bitcoin is at a crossroads again. Over the next day and a half, the release of important economic data could impact the price of the first cryptocurrency.
Potential Impact of Upcoming CPI Data
Consumer Price Index (CPI) report, expected will release important information on inflation trends tomorrow, and numerous analysts will forecast potential market volatility based on the results.
Current forecasts suggest headline inflation is likely to ease year-on-year to 2.6%, down slightly from 2.9% in the previous month.
Meanwhile, core inflation, which excludes more volatile food and energy price inflation, is expected to remain steady at 3.2%. On a month-on-month basis, both core and core CPI are expected to rise by 0.2%.
If the data matches these estimates, it could confirm current market expectations for a modest 25 basis point rate cut next year. Federal Reserve meeting.
However, if inflation figures come in higher than expected, concerns about stagflation could arise, especially given the weaker economic data we have seen recently. An unexpectedly high CPI could raise concerns that inflation will remain stubborn, raising concerns about the need for additional Fed action.
On the other hand, the unexpected decline in inflation The data may indicate that upside risks are becoming more prominent.
In such a scenario, markets could interpret this as a more likely move by the Fed to support the economy in the shorter term, which could lead to a rise in risk assets like Bitcoin.
However, any significant deviation from expectations could trigger “risk aversion”, with higher inflation likely to be a more powerful driver of downward pressure on markets.
Key Technical Factors for Bitcoin
Interestingly, Bitcoin technical indicators suggest that the cryptocurrency is at a turning point. Currently, Bitcoin is hovering around $56,940, which is a critical point on the daily chart and the next move could set the trend for the near future.
On the DMI, the +DI (blue line) has recently jumped but is now falling and is at 18.75. The -DI (orange line) is falling but remains higher at 25.53. The ADX (red line), which measures the strength of the trend, is currently at 24.38 and is slowly falling.
These signals indicate that while there may still be a bit more downward pressure, the strength of this current downtrend is waning. However, since the ADX is trending lower, this indicates that there is no strong directional push at this time.
Bitcoin Support and Resistance Levels
In addition, on the daily chart, Bitcoin is slightly above the upward trend trend line supportwhich has provided a buffer for the price since May. This rising line has been crucial in maintaining the bullish structure, even during periods of high volatility.
If Bitcoin breaks below this line, it could trigger a larger sell-off, which could lead to lower prices and a test of lower Fibonacci reversal points.
In this scenario, immediate support is at S1 ($51,513.89), which is close to the trend line. If Bitcoin holds above this level, it could pave the way for a rebound with potential resistance on R1 (US$64,241.96) and R2 (US$68,173.67).
However, a break below this support could lead to further declines in Bitcoin to the S2 level ($47,582.18) and possibly even to the S3 level ($41,218.14).
The overhead resistance level at R3 ($74,537.70) may seem far away, but in the event of an unexpected surge in growth – perhaps driven by favorable CPI data or a rate cut announcement – it would not be completely out of reach.
