Has Bitcoin’s Price Hit Its Bottom as CPI Levels Off Slightly?

Recent data from the US Bureau of Labor and Statistics shows that the Consumer Price Index (CPI) has remained relatively consistent over the last 2 months.

CPI line chart (Source: Investing.com)

As seen from the line chart above, the US CPI has leveled off somewhat over the last two months after being on an extreme positive slope since June 2020. In this period, the CPI has risen from 0.1 to 8.7. In the last two months, the CPI has only increased by 0.1. With this being the case, is Bitcoin (BTC) finally establishing its bottom as inflation may be leveling off?

Recently, BTC has broken above the $20,000 level according to CoinMarketCap. Its price now stands at around $20,107.97.

BTC monthly chart (Source: CoinMarketCap)

Looking at the daily chart for BTC, the price of BTC has reached a major level on the monthly chart around the $20,000 level. This is after the price of BTC closed the previous months in losses as the CPI continued to rise throughout these months.

As a result of the continued price fall, the 9 Moving Average (MA) has crossed below the 20 Moving Average (MA) for the first time in BTC’s history. This is a bearish flag that suggests that BTC’s price may continue to fall.

With this being the case, the $20,000 level may not be able to hold off the selling pressure seen on the monthly chart for much longer. It would be fair to say that the BTC has established its bottom if the 9 MA and 20 MA lines were positioned differently, with the 9 MA positioned above the 20 MA.

Disclaimer: The views and opinions expressed in this article are solely the author’s and do not necessarily reflect the views of CQ. No information in this article should be interpreted as investment advice. CQ encourages all users to do their own research before investing in cryptocurrencies.

Source