As a seasoned analyst with over two decades of experience navigating financial markets, I find myself standing at a crossroads as I analyze the recent Bitcoin (BTC) price action. The latest dip below $87,000, following the all-time highs on Nov. 13, is reminiscent of a rollercoaster ride that I’ve been on countless times during my career.
On November 15, Bitcoin (BTC) touched important nearby bottom levels, as buyers shifted their focus from testing new record highs to providing support.
Bitcoin cools as US PPI sparks stagflation talk
Data from CryptoMoon Markets Pro and TradingView showed a BTC price dip below $87,000 into the daily close.
Following its peak on November 13th at record heights of $90,000, the market found resistance and could not sustain prices that high. Instead, it retreated to a more stable level.
The recently released U.S. inflation figures, specifically the October reading of the Producer Price Index (PPI), indicate a resurgence of inflationary pressures following the Federal Reserve’s decision to lower interest rates.
PPI was 2.4% for October, per data from the Bureau of Labor Statistics, 0.1% above expectations.
In a recent update, The Kobeissi Letter noted that both Producer Price Index (PPI) and Consumer Price Index (CPI) inflation rates have started to increase again, with Core Inflation exceeding 3.0%.
“The Fed’s job is still far from done here.”
In simpler terms, the recent shift towards more cautious monetary policies due to increasing prices has once again become a focus for investors in both traditional markets (risk assets) and cryptocurrencies.
Based on data from CME Group’s FedWatch Tool, there was a 58% probability that the Federal Reserve would lower interest rates again during their meeting in December, as compared to the previous day’s probability of 82%.
As a cryptocurrency investor, I’m mindful of Kobeissi’s caution about escalating prices and a struggling job market potentially leading to a challenging situation for the Federal Reserve – stagflation.
In simpler terms, this predicament the Federal Reserve finds itself in is a no-win scenario.
“If you raise rates, we head into a recession, if you cut rates, inflation rises even further.”
BTC price faces “aggressive” selling and $86K line in the sand
Given Bitcoin’s decreased momentum due to recent inflation data and cautious remarks by Federal Reserve Chair Jerome Powell, analysts advised maintaining a defensive position near the $87,000 price range.
As a researcher, I’ve observed that it seems plausible that the same passive buyer has been active in the price dips around the $87K mark on lower timeframes, according to the analysis of popular trader Skew.
“Probably filled 800BTC + Which is also very contextual for this low because if lost again they would probably sell some portion of that risk.”
Later on, Skew observed a “pushy trader attempting to drive down” the price of Bitcoin (BTC) against the U.S. Dollar.
Simultaneously, Keith Alan, a partner at Material Indicators (a trading resource), suggested that BTC’s price might find reinforcement in returning to around $80,000 again, which could potentially provide relief and strengthen its value in the long run.
“A second test of Bitcoin’s support at $86,000 would be beneficial, helping us understand whether the current ‘TrumpPump’ can continue towards $100,000 or if it might slow down for a longer period.” He shared this perspective with his X followers.
In the near future, Alan proposed an idea that the value of Bitcoin might reach its peak psychological level, approximately $100,000, around the Thanksgiving celebration on November 28th.
To do so, however, it needed to preserve a rising short-term trend line.
“If support fails at the line, price will search for support in the $75k – $76k range,” he warned.
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2024-11-15 08:37