Bitcoin Gains Despite Rising US Inflation
Introduction
Bitcoin (BTC) continued to rise into the Sep. 14 Wall Street open, even as new macro data showed a resurgence in United States inflation.
Bitcoin Gains while U.S. PPI Beats Forecast
Data from Cointelegraph Markets Pro and TradingView followed BTC price action as it reached new September highs, peaking at $26,762.
Bitcoin continued to gain strength from the previous daily close, disregarding the implications of the U.S. inflation rebound as confirmed by the Consumer Price Index (CPI) and Producer Price Index (PPI) August prints.
The PPI came in at 1.6% year-on-year, surpassing market expectations of 1.3%.
Despite this, the cryptocurrency market, like traditional markets, rejected the idea that U.S. macro policy might remain restrictive for a longer period to control inflation.
According to CME Group’s FedWatch Tool, there was almost no consensus on the Federal Reserve raising interest rates again later in the month. Instead, the odds of a rate hike pause stood at 97% at the time of writing.
The disconnect between the data and market sentiment was highlighted by the European Central Bank’s decision to raise rates by 0.25% on the same day.
“This is their 10th consecutive rate hike, putting rates at 4.5%, their highest since 2001,” wrote financial commentary resource The Kobeissi Letter in a reaction on X (formerly Twitter).
“The ECB also cut all their growth forecasts through 2025. The fight against inflation is far from over.”
Kobeissi added that although the ECB had signaled that the latest hike could be the last in the current cycle, futures markets were still 30% sure of continuation.
“Central banks around the world are bracing for a LONG pause with elevated rates,” it concluded.
BTC Price Predictions Pass $27,000
Market participants were hopeful that Bitcoin’s price would continue to rise, with the potential to reach $27,000.
#Bitcoin Knocking on the door of the $26.4K level again.
It’s key to break this level to leave this post grayscale dump range and attempt at filling the inefficiency up to ~$27K. https://t.co/yY0tiWT58w pic.twitter.com/gkTLNKP5gB
— Daan Crypto Trades (@DaanCrypto) September 14, 2023
“Bitcoin still acting out the Power of Three setup – pushing into the local resistance,” popular trader Jelle told X subscribers in part of the day’s analysis.
“Break above $26,400 and I got my eyes on $27,600 next.”
Trader and analyst Rekt Capital, however, took a more conservative approach to the BTC price outlook. He observed an ongoing repeat of a chart fractal from 2021, which coincided with Bitcoin’s latest all-time high.
“Bitcoin bounces from ~$26,000. And as long as $26k holds as support, Phase A-B of the fractal could be in play,” he wrote alongside explanatory charts.
“But we’ve seen this fractal occur in 2019 and 2021 as well. A relief rally followed by rejection could reveal a weakening support at $26k.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
