Will the price of Bitcoin continue to decline following the latest US CPI data, or is the price rebound still possible? Let’s find out what makes it possible to reach the $70,000 level.
Bitcoin price drops below $60,000 following US CPI data, so how far can the price of Bitcoin rise again? – Source: Cryptonews The price of Bitcoin continued its decline to settle below the $60,000 level on Wednesday after the release of inflation data for the US Consumer Price Index (US CPI Data), which came to support the Federal Reserve’s direction to cut interest rates next month.
The CPI reading for July July rose at a monthly pace of 0.2% at an annual rate of 2.9%, which largely matched expectations; the core CPI rose 3.2% year-on-year as expected.
While interest rates within the United States have remained at multi-decade highs, inflation has improved significantly over the past two years, facing tougher financial conditions due to higher real interest rates (the difference between the interest rate announced by the US Federal Reserve and the inflation rate) despite the US economy showing signs of slowing.
More importantly, the new jobs data in the US released earlier this month showed signs of a possible recession and caused chaos in markets early last week.
Therefore, most analysts agreed that it makes sense for the Federal Reserve to start cutting interest rates, which could provide a favorable environment for investing in risky assets such as Bitcoin (Bitcoin-BTC).
Currently, the price of the BTC/USD pair remains below the key resistance levels set by the 21, 50 and 200-day daily movement averages lines, as the failure of the price to surpass the nearest resistance level in the $62,000 area seems to have provided the initiative for sellers and facilitated their task of pushing the BTC price below the $60,000 level. However, indices still suggest an imminent rebound that could prompt him to retest July July highs around $72,000 due to several factors.
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Here’s why Bitcoin might surpass $70,000 again
As long as the new data does not indicate that the US economy could slide into recession and supports the Federal Reserve’s drive to cut interest rates, the formation of “stable” macroeconomic factors may provide a favorable environment for the prosperity of riskier assets, which may create favorable conditions that stimulate new investments in Bitcoin Spot ETFs and contribute to their appreciation.
But that’s not the only reason why prices are likely to move higher in the foreseeable future, as a recent report by CryptoQuant highlighted data showing that the Bitcoin sell-off stopped following halving, meaning that the current Bitcoin price could represent its current likely lows.
Halving the BTC mining reward rate this year has led to the hash rate, which represents the average revenue per unit of mining power, falling to a new record low recently, and the decline in profitability has left less efficient Bitcoin under enormous pressure, forcing them to exit the market and sell their BTC holdings to face their increasingly difficult operating conditions, which in turn led to an extended sell-off.
On the other hand, the retail rate has recently risen again and reached a new record, indicating that miners are selling their currency holdings and are now enjoying a positive outlook. This rise also indicates that the selling pressure from the miners that followed the halving has eased, and technical indicators are also supporting the possibility of the price crossing the $70,000 barrier again, as the Titan of Crypto account on the X platform indicated that the MACD reading of Bitcoin’s price movements has recently moved to a positive value.
The surgance is a good sign that a price rebound is possible in the coming months, according to the chart published by the Titan of Crypto account.
Finally, the Relative Strength Index (RSI) of Bitcoin’s 14-day price movements has rebounded and recovered after continuing to indicate that the currency has been subjected to a recent overselling; this recovery is linked to the possibility of an imminent price rebound, as previously shown by price movements over recent months after experiencing similar conditions.
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