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Bitcoin (BTC) Price Prediction: Drops to $118k Ahead of Tuesday CPI Inflation Report
The market has witnessed a significant decline in the price of Bitcoin, as it dropped 2.8% and currently trades at $118,630. This substantial drop is largely attributed to traders positioning themselves ahead of the highly anticipated Tuesday’s Consumer Price Index (CPI) inflation report.
As we approach the release of this data, investors are adopting a cautious stance, resulting in a correction in the price of Bitcoin. The cryptocurrency has faced resistance above $120,000 and has been unable to break through this level. It is crucial to monitor market developments and assess the CPI report’s impact on Federal Reserve policy decisions.
The correlation between Bitcoin’s price and US equities stands at 0.76, highlighting the strong connection between these markets. The inflation data could significantly influence the direction of the cryptocurrency’s price. If the reading comes in below forecasts, it may lead to an increase in risk sentiment, supporting a potential break above $120,000.
On the other hand, if the inflation report reveals higher-than-expected readings, Bitcoin could become increasingly bearish and potentially drop further. Market participant attention is now focused on this data release, with Bitcoin’s short-term direction heavily dependent on its outcome.
It’s essential to analyze fundamental factors while assessing market trends and sentiment. Long-term holders have significantly reduced their selling pressure after the massive profit-taking in July, which could contribute to the cryptocurrency maintaining levels above $118,000 despite broader market weakness.
The recent surge of new Bitcoin addresses has increased by 15% over the past ten days, indicating growing interest from fresh investors. This trend will likely continue to support the price stability of Bitcoin.
Source: coincentral.com
