Bitcoin (BTC) Price Recovers After CPI Data Dims — Bulls Target $60,000 Next
Bitcoin Recovers After CPI Data | Credit: Hameem Sarwar
Key Takeaways
- Bitcoin (BTC) fell after the CPI report came lower than expected on Sept. 11.
- BTC recovered shortly afterward, closing the day above $57,000.
- Can Bitcoin maintain its momentum and increase above $60,000?
The Bitcoin price has fallen since its all-time high of $73,777 on March 14. In the short term, however, it has recovered since Aug. 5 and even created a higher low on Sept. 6.
On Sept. 11, the United States Consumer Price Index (CPI) data for September 2024 came slightly lower than expected. This initially caused a short-term decline, but the BTC price recovered before the end of the day.
Can BTC maintain this momentum and increase above $60,000, or will it falter in the second half of September?
Bitcoin Falls After CPI Data
The CPI measures the change in price of a basket of goods and is used to track inflation and purchasing power. The percentage change is relative to the same basket in the previous year.
On Sept. 11, the CPI data release came at 2.5%, slightly below expectations of 2.6%. However, the core inflation rate came at 3.2%, in line with the forecasts. The fact that core inflation did not come lower has changed the expectations of an interest rate cut from 50 to 25 basis points. The FOMC meeting will be on Sept. 17-18.
In our previous analysis, we determined that while the BTC price reacts to the CPI inflation news in the short term, the daily candlestick is never significant. This happened on Sept. 11, when the BTC price fell sharply (white icon) after the announcement. However, it recovered in the next four hours, creating successive bullish candlesticks.
Ultimately, the daily opening and closing prices were only $267 away from each other.
Bitcoin Price Gives Bullish Signal
The daily chart shows that BTC has fallen inside a descending parallel channel since March. In August, it risked a breakdown below the channel but bounced and reclaimed it the next day, leaving a massive lower wick in its wake (white icon).
Then, the price created a higher low on Sept. 5. This is the first higher since the all-time high in March, during which the price of BTC created three lower lows. The next BTC resistance is created by the middle of the channel at $61,000.
The RSI and MACD give a very specific bullish signal. Both have generated bullish divergence at the same lows (green). While this is uncommon, it becomes even rarer when combined with the fact that the RSI also moved outside its oversold territory. It has happened only two other times in the past four years.
In September 2023, the price increased by 100% after the signal, while it did so by 138% in June 2021. At the time, the increase led to a new all-time high Bitcoin price.
So, if previous history is followed, BTC will soon increase toward a new all-time high price.
Bitcoin’s Correction Could Be Over
On Sept. 6, the Bitcoin price created its first higher low in six months. The low was combined with a bullish signal in the RSI and MACD that previously led to increases of 98% and 138%, respectively. These bullish signs suggest the price might have bottomed and begun a new upward movement. The closest resistance area is at $61,000.
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