Bitcoin: Every day brings a new story in the crypto world, and today also brought something special for Bitcoin. Bitcoin jumped to $114,731 after the US Consumer Price Index (CPI) data came out, sparking a mix of excitement and questions among investors and traders. The data came in line with market expectations, further fueling talk of a possible Fed interest rate cut.
Bitcoin reacts to CPI data
Bitcoin saw sudden surges and fluctuations as Wall Street opened on Thursday. CPI data for the month of August recorded a 0.4% increase, the highest rate since January. Also, unemployment claims rose to 263,000, indicating the weakest labor market since October 2021.
The market viewed this data with a view that the Federal Reserve could possibly cut interest rates on September 17. According to CME FedWatch, the probability of a 50 basis point cut is now 11%, and a total of 75 basis points are expected by the end of the year. Due to this, Bitcoin/USD briefly crossed $114,700, the highest level since August 24.
Traders became optimistic but caution is also necessary
After the CPI data came, some enthusiasm was seen among crypto traders. Some analysts believe that inflation remained lower than expected, so a rate cut is likely later this month. An analyst named Jelle said on X (formerly Twitter), “The news is now behind us, it’s time to extend the program: higher.” Along with this, some pointed out the support level of Bitcoin. BitBull reported that Bitcoin has turned $113,500 from resistance to support, marking “a significant retest.” This could open the way to $117,000 and a new all-time high.
Could BTC repeat previous CPI fakeouts
Not everyone agrees with this bullish mood. Some traders and investors are warning that investors with long positions in the market could be trapped. A trader named Skew reported that exchange order books have 2,000 BTC of liquidity, which could lead to a “washout” before higher prices.
Similarly, investor Ted Pillows pointed out that in the last three CPI releases, Bitcoin showed a rally before the data came out and then a sell-off followed. “This time BTC has shown a rally before the CPI data came out this could mean a decline is also coming,” he wrote.
What will be Bitcoin’s next move
After finding support at $113,500, traders are now looking at $117,000 as the next resistance range. If this level is crossed, a return to the historical high of $124,000 remains possible. On the other hand, if Bitcoin loses support at $113,500, a drop to $110,000 could occur.
Meanwhile, both investors and traders are cautious. It is important to understand technical analysis and market signals, as the world of cryptocurrencies is always unpredictable. One moment there can be happiness and the next moment there can be anxiety.
Today has brought a mix of optimism and caution for Bitcoin. The possibility of a rate cut as per the CPI data has excited traders, but warnings of a reversal of past patterns and a possible fakeout also remain. The $113,500 and $117,000 levels are important and need to be tracked carefully. There are always both opportunities and risks in the world of crypto. Only the right decision at the right time can prove to be beneficial. Therefore, proper research and understanding is necessary before investing.
Disclaimer: This article is written for information purposes only. Do your own research before investing and take professional advice before making any financial decisions. Investing in Bitcoin and other cryptocurrencies comes with risk.
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