Despite a positive US inflation data, Bitcoin price was unable to overcome a critical resistance level on Thursday, making it a pivotal day for the cryptocurrency markets. The report, which revealed the first decline in consumer prices in four years, at first lifted investor confidence and prompted further betting on a possible rate decrease by the Federal Reserve. Higher-risk assets, like Bitcoin, saw a temporary increase as a result.
BTC bulls were initially optimistic, but they were unable to break above the declining trendline that has marked the sell-off from June highs close to $72,000. Early today, prices turned negative and fell below $57,000 as a result of the optimistic hopes shattered by the inability to break past the barrier.
With good macroeconomic statistics in the background, the recent failure of the bull market makes it more likely that prices will fall even more. After a similar rejection at the trendline on July 1, there was a bigger sell-off. This shows that the market is still sensitive to levels of resistance.
The Labor Bureau Releases CPI Data
The Bureau of Labor Statistics publishes the Consumer Price Index (CPI) figures. They demonstrate how pricing for various goods and services have evolved throughout time. The CPI increased by 3.0% in the fiscal year ending June 30, slightly less than the 3.1% increase predicted by analysts. In June, there was a 0.1% monthly fall in inflation, which was the first since May 2020. This came after May’s flat reading.
Following the announcement of the CPI numbers, Bitcoin had a temporary recovery from its previous four-month low, rising above $59,000. In a 24-hour span, the alpha coin lost a lot of steam and backpedaled to the critical $56,600 field, a 0.8% loss. Even in light of the upbeat inflation narratives, market dynamics are still complicated.
Germany Done Unloading Crypto
The German government is getting close to finishing its protracted Bitcoin liquidation procedure, which is a noteworthy milestone. The country possessed 50,000 BTCs earlier in June; at current market values, that is worth around $2.8 billion.
German investors have moved billions of dollars’ worth of Bitcoin since June 20 to prominent cryptocurrency exchanges including Kraken, Coinbase, and Bitstamp, wealth management company Cumberland, and more addresses thought to be associated with institutional or over-the-counter trading desks. The German government’s wallets have just 4,925 BTC, or around $284 million at current rates, according to on-chain statistics from Arkham Intelligence.
The government started the outflows this week at a slow pace but they quickly picked up steam, with $900 million leaving its coffers on Monday alone. As of Wednesday, the German government owned less than $1 billion worth of Bitcoin. Most analysts believe that since these coins have been sent to trading platforms, they are being sold on the market, which has added to the sell pressure that has affected the price of Bitcoin in recent weeks.
What’s Down In Texas?
Texas’s electricity system is under unprecedented stress as the state fights an unending heatwave. The importance of Bitcoin mining in keeping the grid stable during this energy crisis is becoming more well known. Rob Chang, CEO of Gryphon Digital Mining, and host Rob Nelson talked about the challenges and potential solutions presented by Bitcoin mining at a recent roundtable.
Nelson emphasized the heatwave’s devastating effects on Texas’s electrical grid while pointing out Bitcoin mining’s special capacity to maintain and balance the system. He underlined, “No other business has such flexibility as Bitcoin’s capacity to shift electricity onto a major power grid and pull it back off in nearly no time.”
Chang retorted that Gryphon Digital Mining deliberately stays out of Texas because of the intense heat, which would need regular equipment shutdowns for mining. He did, however, concede that Bitcoin mining significantly improves the electrical grid. According to Chang, “Bitcoin mining facilities function as peaker plants, transferring electricity to the network as needed.” Because of this flexibility, Bitcoin miners may shut down during times of high demand, freeing up electricity for the larger grid.
Biden Urged to Back Cryptocurrency
A D.C.-based tech industry association called The Chamber of Progress is pleading with President Joe Biden to back bipartisan, pro-crypto legislation in order to win over more young voters, given that over 18 million Americans are currently investing in cryptocurrencies.
The Chamber of Progress is pleading with the Biden administration to support comprehensive cryptocurrency regulation in advance of a Bitcoin roundtable this month, citing the critical juncture in the US election cycle. Millennial and Gen Z voters, who are becoming more interested in digital assets, are the target audience for this move, which attempts to protect their votes.
In a letter to President Biden on Tuesday, the coalition said, “More than half of those age groups are in favor of a federal policy that promotes digital asset use in the United States.” According to survey data given by the Chamber of Progress, one in five voters perceive cryptocurrency laws as a key voting issue in the 2024 election, and over half of voters think that greater restrictions are necessary for the cryptocurrency industry in the United States.
Kiyosaki: Acquire More BTC
In an effort to “transform a terrible hand into a terrific hand,” well-known investor and author Robert Kiyosaki has once again pushed investors to purchase more Bitcoin and precious metals like gold and silver.
Although it was unclear which market sector Kiyosaki was referring to as the “bad hand,” considering the recent spike in stock prices, it is probable that his remarks were aimed at Bitcoin, which has had a precipitous decline in value recently.
Although safe-haven products like gold and silver are usually connected with them, many individuals who embrace Bitcoin also see the digital currency in this sense. Kiyosaki’s advice mirrors a long-term hopeful perspective of Bitcoin and precious metals as shields against economic volatility.
The Movement in Bitcoin Prices
The value of bitcoin has risen by 1.3% to $58,137 during the past day. The excitement around the release of multiple exchange-traded funds drove the token’s price to a record high of nearly $74,000 in mid-March; yet, it has subsequently plummeted.
Right now, Bitcoin is stabilizing below the important $58,516–$60,155 support zone after a recent price drop below these levels. Decline in purchase pressure indicates a notable drop in optimistic activity, thereby preserving the price within a limited range.
Though it hasn’t yet started a significant movement, the Relative Strength Index (RSI) is striving to rise from the lower level. This suggests that the price of Bitcoin is most likely range-bound till it crosses the main barrier at the 200-day moving average (MA) of $58,761. Should these targets be satisfied, bitcoin price may re-enter a positive range and surpass $60,000.
Image by Monoar Rahman Rony from Pixabay
