Most recently, during the FOMC meeting, the Fed was dovish on raising rates, raising rates by only 0.25% instead of 0.50%. Today, traders and investors had hoped that inflation would fall in January.
This positive anticipation led to a slight market recovery as the world’s first cryptocurrency, bitcoin price, has recovered the lost $22,000 area. Therefore, Bitcoin’s inverse price action has affected other cryptocurrencies as well.
On the contrary, according to reports, the CPI data for January has reached 6.4%, while the expected data is 6.2%. The JPMorgan analyst also claimed that even if the cryptocurrency market rebounds after the positive CPI data, the rally will not last long. If the market turns out the way JPMorgan analyzes it, it’s likely to be another buy news event.
Bitcoin trend reversal ahead?
Crypto markets are up slightly, just ahead of January’s Consumer Price Index (CPI) data. Also, even the U.S. dollar index (DXY) is trending higher, along with the S&P 500 and Nasdaq, on the back of expected positive inflation data.
Now, higher-than-expected CPI data has Bitcoin oscillating between $21,900 and $22,000. However, according to the data, Bitcoin is now struggling to form a bear trap pattern. A bear trap pattern is nothing but an overall bullish downtrend. If this turns out to be true, Bitcoin could be heading towards the $25,000 mark soon.
Overall, inflation data remains positive, which could lead to a counter-action for Bitcoin. If Bitcoin has to move towards its positive trend, the Bitcoin price must break its first major resistance at $22,500 and then the $23,000 level. At the time of writing, Bitcoin is selling for $21,994 after surging 2.16% over the past 24 hours.