How the release of consumer price index (CPI) data will affect the price of bitcoin (BTC)
Date: 2023-08-13 Author: Karina Ziganova Categories: BLOCKCHAIN
Already today, the US Bureau of Labor Statistics will publish regular data on the consumer price index (CPI). We understand how they can affect the price of bitcoin (BTC).
As the popularity of bitcoin among institutional investors grows, the impact of monthly data on the consumer price index on the price of the asset becomes more and more noticeable. Within 48 hours of the release of the latest CPI data on July 12, the price of BTC surged 4% to hit a new yearly high of over $31,500.
How Macro Data Affects BTC Quotes
Historical data shows that bitcoin often rises when markets expect the CPI to decline or rise conservatively. Thus, data on the consumer price index, published on July 12, showed that over the previous month, inflation rose slightly, by only 1%.
In the week leading up to the release of CPI data on July 12, the price of BTC rose by 5%. This was followed by another 4% rally, which saw the price of the asset reach a new peak in 2023.
A similar picture is observed this week. On August 9, the price of bitcoin closed at $29,900, up 4% from August 8. Readings of key on-chain metrics indicate that traders are preparing for a new wave of growth.
The volume of transactions in the Bitcoin network has doubled
According to the analytical platform Santiment, the volume of BTC transactions has been progressively increasing for 4 trading days in a row. As shown in the chart below, it soared 104% between August 6 and 9, from 147,670 to 302,500.
Transaction volume measures the change in overall economic activity on the network. Its growth is often a bullish signal indicating the interest of market participants in the asset.
Considering the historical precedent of July, the 104% jump in the indicator is a clear indication that traders are preparing for a new wave of bullish price action in the coming days.
Investors moved 14,500 BTC off exchanges
Over the past week, investors have been actively withdrawing BTC from centralized exchanges, which once again confirms the possibility of a bullish scenario. The Cryptoquant data below illustrates a 14,577 bitcoin drop in Bitcoin exchange reserves in the first 10 days of August.
Against the background of growing demand in the market, fueled by positive expectations for the CPI, such a decrease in exchange supply could provoke an increase in the price of bitcoin in the coming days.
Bitcoin Price Prediction: Another Rush to $32,000
Given the above factors, bulls could take advantage of the upcoming CPI data release to push bitcoin to $32,000. However, they will first have to overcome resistance from the 2.2 million addresses that purchased 976,780 BTC at a high price of $30,403.
In the event of a fall below $28,000, the bears will nullify the positive outlook. The 1.92 million wallets that bought 933,600 bitcoins at an average price of $28,583 could trigger a bounce - but if they fail, the price of the main cryptocurrency will fall back to $27,500.
