From cointelegraph by Yashu Gola
Bitcoin’s price has dropped by over 2% in the last 24 hours to reach around $96,150 on Feb. 12.
Key takeaways:
- Bitcoin’s drawdown follows US Federal Reserve Chairman Jerome Powell’s hawkish remarks in the Senate Banking Committee hearing.
- Traders are also de-risking ahead of a key US inflation print on Feb. 12.
- Bitcoin price needs to hold above a key support area to avoid a deeper correction.
Hawkish Powell pressures Bitcoin, altcoins down
Bitcoin’s drop in the last 24 hours followed Powell’s outlook on interest rates going further in 2025.
Key takeaways from Powell’s speech.
- No urgency to adjust interest rates, as inflation remains a concern.
- Cutting rates too fast or too aggressively could undo progress in controlling inflation.
- Delaying or reducing cuts too much might slow economic growth and impact jobs.
Market’s reaction after Powell’s statement.
- Treasury bond yields stayed elevated, making traditional high-yield assets more attractive than riskier assets.
- Crypto markets pulled back, with Bitcoin and altcoins facing sell-offs.
- CME FedWatch Tool sees 95.5% probability that rates stay unchanged at the March 19 meeting, up from 75.5% a month ago.
- A rate cut isn’t fully priced in until September 2025.
- Fewer than two rate cuts expected for the entire year, limiting upside momentum for risk assets.
Traders de-risk ahead of inflation data
Bitcoin’s decline today appears ahead of the release of US consumer price index (CPI) report.
Things to know:
- Inflation likely remained stubborn in January, according to a Bloomberg survey.
- Economists expect core CPI (excluding food and energy) to rise 0.3% from December, based on estimates from the Bureau of Labor Statistics.
- Year-over-year core CPI is projected to increase by 3.1%.
- Core CPI has risen by 0.3% the fifth time in the last six months, signaling stalled progress in reducing inflation.
- Higher-than-expected inflation data could support the Fed’s patient approach to maintaining higher interest rates, limiting liquidity in crypto markets.
Related: Easing inflation could ignite another BTC rally: 10x Research
- Historical trends show that Bitcoin often experiences short-term sell-offs around CPI releases, followed by a sharp move in either direction once the data is out.
Bitcoin price faces stiff resistance at 50-day EMA
Bitcoin’s drop today has appeared after testing its 50-day exponential moving average (50-day EMA; the red wave) at around $98,200 as resistance.
Key points:
- Bitcoin has continuously attempted to rise above the 50-day EMA since Feb. 5, failing every time.
- The 50-day EMA aligns with the horizontal resistance level at around $98,000.
- Despite interim corrections, Bitcoin is treading inside a broader ascending triangle channel.
- A clear break above the 50-day EMA resistance will likely push Bitcoin toward the triangle’s upper trendline at around $106,000.
- Conversely, breaking below the trendline’s lower trendline could push BTC’s price toward $88,000, aligning with the 0.382 Fib retracement line.
All Comments