Bitcoin Price Fails To Seal New CPI Gains As $18,000 Support Holds Balance

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Bitcoin (BTC) hovered at $18,000 at Wall Street’s open on January 12 despite the continued decline in US inflation.

BTC/USD 1 hour candle chart (Bitstamp). Source: TradingViewBitcoin Traders Remain Cautious After CPI

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD encountering predictable volatility around the December Consumer Price Index (CPI) data release.

The first such release in 2023, the event preceded the start of trading on Wall Street, with Bitcoin briefly deviating higher before returning to threaten a breakout below the $18,000 mark.

In doing so, the largest cryptocurrency copied the behavior of a month prior, with resistance at $18,500 remaining untested.

The CPI came in at 6.5% year-on-year, in line with most forecasts. Open Market Committee (FOMC).

Fed Target Rate Probability Chart. Source: CME Group

For traders, it was still a “wait and see” despite continued downward inflation trend in the US

“Not every pump means the bottom is reached and a reversal occurs,” popular Crypto trader and analyst Tony warned in part of a Twitter update.

“We enter a bull market when we see higher highs and lower lows on Bitcoin that we haven’t yet.” Vote now!

Michal van de Poppe, founder and CEO of trading firm Eight, also suggested that Bitcoin could see a temporary dip next before joining a broader rally in risky assets based on CPI data.

“Another month with falling inflation, now lower than November 2021. Month over month, even showing negative numbers,” he tweeted.

“Fuel for a 2-4 month period of relief for the markets, but likely a short-term correction soon for Bitcoin.”

A subsequent article bolstered the odds of a “likely” decline for BTC/USD, potentially towards $17,700.

BTC/USD annotated chart. Source: Michal van de Poppe/Twitter Sticky inflation leads to stable stocks opening

Meanwhile, stocks, which had already priced in the CPI result, remained silent in the hour after the open.

Related: 13% of BTC Supply Returns to Profit as Bitcoin Sees “Massive” Accumulation

At the time of writing, the S&P 500 and Nasdaq composite indices were both up 0.2% on the day.

Popular analyst account Tedtalksmacro noted that core inflation remained “sticky”, which could help dampen sentiment despite the overall trend.

“The clear trend is that inflation has been brought under control + we have yet to see the lagged impact of the Fed hikes,” he continued.

“I have no advantage trading this chop, but where I have an advantage is spotting the trend in the data early… dips are to buy in Q1+Q2, shorts are -EV for me in this environment.”

Crypto markets also kept shorts liquidations in check that day, with Bitcoin erasing $33 million in positions on Jan. 12, as well as $21 million in longs, according to data from Coinglass.

Bitcoin liquidation chart. Source: Coinglass

The views, thoughts and opinions expressed herein are the sole authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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