BTC’s climb to the $43,000-$46,000 price range could be another indication that the multi-month correction is over.
Bitcoin (BTC), and cryptocurrency owners are now enjoying the fruits of the labor of their labors on February 10. Bitcoin price rallied after U.S. Bureau of Labor Statistics printed a shocking 7.5% Consumer Price Index. This is a sign that inflation continues to rise as fiat currencies lose their purchasing power.
Cointelegraph Markets Pro and TradingView data show that Bitcoin prices spiked after trading below $44,000 in the early hours of February 10, and then jumped to $45,850 intraday following the release CPI data. Most major stock market indexes fell into the red.
Here are some thoughts from analysts about how the February 10th CPI print might affect BTC’s price action moving forward. Also, what levels should be monitored as the world struggles with high inflation.
Bitcoin enters a new cycle
Ran Neuner, host CNBC’s Crypto Trader posted the following chart highlighting that “We are now in a new phase now”. He said that this chart shows that BTC is heading higher after a steep downtrend.
Neuner stated,
“This CPI pump confirms that CPI/Interest rates hikes are part and parcel of the old cycle. Since we broke the trend line, there has been a shift in the news and the narrative. It is not an accident. “Be a cyclist.”
Analysts believe the multi-month correction has ended
CryptoBirb, a technical analyst and pseudonymous Twitter User, provided further insight into the trend reversal after a three month correction. He posted the following chart detailing range-bound trading for Bitcoin over the past year. It states that “with a little luck, Bitcoin might see follow-through, even beyond $50,000.”
If BTC can maintain its momentum at these levels, “Bitcoin is close to targets of $46,300-$46,000.
The price action of Bitcoin has defined $51,000 as the most important line in sand. If we want to see the upside, this level could work as a magnet to BTC/USD.
Related: Bitcoin rejects a sell-off because 7.5% US inflation fails BTC down long term
BTC prices decouple from equities
Dalvir Mandara is a quantitative researcher at Macro Hive and addressed the bullish performance of cryptocurrency markets in February. He noted that markets have been digesting Fed hawkishness, pricing in more hikes and the ECB pivoting towards possible hikes in 2022.
Mandara says that the fact that the cryptocurrency market rallied higher despite tighter liquidity conditions suggests that macro factors may not be as important to them now than they were before.
Mandara cited Bitcoin’s correlation with tech stocks as evidence of this shift in the BTC price. It has “fallen from the highs last week of 75% to 50% this week”, Mandara said.
A rolling 30-day correlation between BTC & NASDAQ. Source: Macro Hive
Mandara said,
“Overall, although we believe the crypto macro backdrop is still negative, on-chain/flow metrics are turning more positive so we are moderately optimistic on balance.”
The total cryptocurrency market is now worth $1.996 trillion, and Bitcoin’s dominance rate at 41.9%.
