Incoming CPI data is expected to startle markets, with Bitcoin traders anticipating a “short-term rebound” catalyst. After a rocky start to the week that saw BTC/USD hit three-week lows, Bitcoin (BTC) attempted to retake $40,000 as support on April 12.
Data on the Consumer Price Index is expected to be “extraordinarily elevated.”
According to data from TradingView, the largest cryptocurrency on Bitstamp bounced back to $40,200 on Tuesday after plunging to just $39,300 the day before. Short timeframes saw Bitcoin seem decidedly unappealing, fueled by a bleed-out in tech stocks in particular, and investors betting on bullish continuation were left empty-handed.
According to Coinglass, an on-chain monitoring service, crypto traders have lost a total of $428 million in liquidated long bets in the last 24 hours, the largest in a single day since Jan. 22.
In a Twitter conversation about the current climate, Blockware principal insights analyst William Clemente commented, “This rollover in tech is affecting BTC as well.”
“Whether I agree or disagree, the market appears to view BTC as a high beta tech play, with a rising correlation over the previous month.”
The remarks resembled those of former BitMEX CEO Arthur Hayes, who predicted BTC/USD would drop to $30,000 as a result of the macro setup on Monday.
Meanwhile, the latest Consumer Price Index (CPI) data anticipated later in the day added insult to injury for the US economy and associated sentiment. As the first CPI statistics to be made public since the commencement of the Russia-Ukraine war, the March reading is expected to add to inflationary pressures, which are already at a 40-year high.
The White House now warning of "extraordinarily elevated" inflation data.
This upcoming March CPI print is likely going to extremely ugly.
— Dylan LeClair 🟠 (@DylanLeClair_) April 11, 2022
CPI events have a history of causing short-term volatility in crypto markets, so Tuesday’s 8:30 a.m. Eastern time release is very important for traders. As a result, some were speculating on the possibility of downside pressure easing once the data was made public.
Support for whales means $27,000 in “maximal agony.”
Meanwhile, Whalemap, another on-chain analytics site, proclaimed $27,000 as the “peak pain” target for the market after analysing support levels where large-volume investors have bought BTC. “Unfortunately, the $41,600 did not hold. The new closest on-chain support is $38,400 “On Twitter, it was summarised.
Despite this, a chart depicting whale positions revealed that $41,600 “should have” held due to buyer desire.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.