The US inflation data, which will be released on Friday evening, are expected to send fluctuations between the markets. Also, investors expect this to push Bitcoin (BTC) out of the tight trading range. Here are the details…
How will Bitcoin react to inflation data?
Bitcoin (BTC) is trading around $30,000, a level it has been fluctuating for more than a month. While attempts to break above $32,000 have been met with resistance, traders are also wary of allowing the coin to drop below $28,000. However, the US consumer price index (CPI) data for May may change this trend. Most of BTC’s losses in 2022 are due to fears of rising inflation, which is likely to spur interest rate hikes by the US Federal Reserve.
MarketWatch data shows that markets are expecting 8.1 percent, slightly down from 8.3 percent in April. The general consensus in the market points to two main scenarios for BTC. If the data comes in below expectations, it could trigger a relief rally for the token amid signs that inflation is indeed starting to calm down. BTC could likely climb above the $32,000 ceiling in the short term.
However, according to experts, if the data comes higher than expected, BTC will fall sharply. According to experts, the US Federal Reserve may release high data as a sign of further increasing rates. It can evoke a sense of risk aversion. Given that the knock-on effects of the Russia-Ukraine war are still being felt, traders may need to prepare for a higher-than-expected CPI. The downward pressure on BTC suggests that losses in the coin will be much larger than any gains in the near term. As we reported as Kriptokoin.com, BTC fell to $ 26,000 after the CPI data in April.
How low can BTC go?
Technical indicators show that BTC is currently playing a descending triangle pattern. The coin is more prone to future losses than gains. Crypto analyst Mark Yusko paints a worst-case scenario where the longer BTC spends in this pattern, the more likely it is to drop 50 percent from current levels to $15,000. The analyst uses the following expressions:
The longer the Bitcoin situation, which bounces around $30,000 in this descending triangle, the higher the risk of falling to $15,000.
Such a slump can push BTC above the record low of $68,000 in November. results in a reduction of about 80 percent. In a survey filed by Yusko, the majority of 1,000 respondents expect a drop of as much as $15,000. The largest cryptocurrency is trading at $30,122, down 0.8 percent at the time of writing.
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