Bitcoin (BTC) price is experiencing a slight increase today, maintaining its position above the psychological support level of $30,000 as traders eagerly await the release of key U.S. inflation data.
BTC price saw modest daily gains of 0.68% on July 12, continuing its upward trend that began on July 7. During this time, Bitcoin’s price has risen by almost 3.75%.
Bitcoin’s recent gains are reflective of the anticipation surrounding the release of the U.S. consumer price index (CPI) print on July 12. A survey conducted by Bloomberg indicates that most economists expect both the headline and core inflation to continue decreasing in response to the Federal Reserve’s hawkish policy.
In the previous meeting, the U.S. central bank decided to pause its interest rate hikes. However, Federal Reserve Chair Jerome Powell hinted at the possibility of resuming rate hikes if inflation data falls short of expectations. If the CPI cools as projected, the Fed may consider extending the pause in rate hikes, as reported by Bloomberg.
Simultaneously, the U.S. dollar index (DXY) has reached its lowest levels since May, experiencing a four-day consecutive decline of 2.15%. The weakening of the greenback against major foreign currencies indicates a diminishing appetite for safe-haven assets among global investors.
Bitcoin, often considered a risk-on asset, has likely benefited from these circumstances due to its consistently negative correlation with the U.S. dollar in 2023.
Another factor contributing to Bitcoin’s recent gains is the decrease in its supply on exchanges, which has reached the lowest level in five years. The withdrawal of coins from crypto exchanges is generally perceived as a bullish sign since traders typically withdraw their BTC when they intend to hold it for the long term.
Remarkably, on-chain data demonstrates that Bitcoin HODLers have been accumulating coins throughout 2023 at an average rate of nearly 27,000 BTC per month. In other words, most Bitcoin investors are positioning themselves for a potential price rally in the coming months.
As for the outlook for Bitcoin’s price in July, from a technical perspective, BTC/USD is targeting the $31,000-31,500 range. This range corresponds to Bitcoin’s main resistance level within a sideways consolidation channel.
Conversely, if there is a reversal either now or after testing the $31,000-31,500 range, it could prompt BTC price to test the lower trendline of the channel around $29,900 in July. Traders should pay attention to the Federal Reserve’s upcoming rate decision on July 25-26, as it has the potential to act as a catalyst for market movement.
As the Bitcoin market continues to evolve and respond to various economic factors, it is essential for investors and traders to conduct their own research and exercise caution when making investment decisions.
This article does not offer investment advice or recommendations. It is crucial for readers to assess their own risks and conduct thorough research before making any financial decisions.
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