US inflation data will be ‘messy’ — 5 things to know in Bitcoin this week

Bitcoin (BTC), which is in a precarious situation near $20,000, begins another week ahead of new macro upheaval.

The largest cryptocurrency has struggled to maintain its gains after recording its highest week since March.

Major resistance zones are still visible, and inflation data is due to be released later in the week. This could make it difficult for risk-assets everywhere.

Despite this, crypto market sentiment continues to show signs of recovery and on-chain metrics continue highlighting what should be Bitcoin’s latest macro price bottom.

Cointelegraph examines the potential market-moving factors for the week ahead, despite inconsistent data.

Headaches caused by a 200-week moving mean

The June 10th weekly close of BTC/USD was not much better than the $20,850. However, it still achieved its highest seven-day growth in many months at around $20,850.

Bitcoin ended Sunday $1,600 higher than it was at the beginning of the week. This is a significant step forward that Bitcoin has not seen since March.

However, the success didn’t last long as the hour following the weekly close was negative. According to Cointelegraph Markets Pro data and TradingView, BTC/USD was at $20,400 as of the time this article was written.

BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView

The ability of Bitcoin to maintain current levels could determine the mood this summer, as relief from global equities could allow crypto to erase some losses.

The weekly chart was therefore closely watched by commentators, including traders suite Decentrader.

Weekly view on $BTC futures. The current candle will close with a bullish engulfing line above the Moonraker. Weekly vwap is also in place. Momentum is also rising. If stocks continue to rise and experience a summer rally, $BTC or crypto will likely follow. https://t.co/tlkrnTsG33
— Decentrader (@decentrader), July 10, 2022

Others were less enthusiastic and noted that BTC/USD still performed below the 200-week moving average (WMA), at $22,500.

The 200 WMA was a support level that Bitcoin used to trade below in bear markets. This allowed for Bitcoin to wick under it briefly and put in macro bottoms. The chart has been missing $22,500 for one month, but this time it seems to be different.

The #BTC weekly candle rallied by +15%, but it is still resisting below the 200MA for three weeks. Markets remain cautious, but indicators are cooling down in the shorter time frames. Will #Bitcoin rise above the 200MA weekly before the weekly closes? pic.twitter.com/NZXbxK8Oi2
Steve Courtney, Crypto Crew University (@CryptoCrewU), July 8, 2022

TechDev, a popular trader, advocated a more positive outlook for 2022.

He argued that Bitcoin’s “reaccumulation phase” should be ended by the end of the year.

TechDev shared the following tweet: “BTC flipping 32-35K most likely confirms end to reaccumulation”

“Most likely to occur iso once both 100W EMAs and 50W EMAs fall within this range. 100W at 34.8K, 50W at 37.2K.

Selling pressure was also increased by the continued asset liquidation of Celsius, a crypto lending platform in trouble.

Celsius continues to send its remaining cryptoassets on exchanges. A few hours ago, 2,000 bitcoins were transferred from the main wallet and hit Binance and Coinbase after a series hopping. Remaining key assets: 410k stETH ($479mm) 16k wBTC ($342mm) pic.twitter.com/ae6viYL1Jk
— light (@lightcrypto), July 10, 2022

As Asia markets fall, the dollar continues to rise

Asian stocks fell on July 11, as news about social unrest in China clouded the start of the macro week.

Markets felt the pressure as protestors demanded that frozen funds be released amid a scandal involving both local authorities and bank officials.

The Shanghai Composite Index was down 1.5% at the time of writing. Hong Kong’s Hang Seng was 3.1% higher.

Europe did slightly better, with moderate growth in the FTSE 100 as well as Germany’s DAX. The United States is still to open.

However, before Wall Street returned, the U.S. Dollar index (DXY), was already making new strides higher, cancelling a retracement that had provided a cooler ending to last week.

DXY stood at 107.4 on Jul 11, just 0.4 points below the twenty-year highs of days before.

One analyst from trading firm The Rock described DXY’s year-to-date growth as “as extreme as it gets”.

He wrote that “based on the extreme rally this year, DXY is now up 16 percent year-on-year.”

“This is as extreme as it gets historically speaking, and unfortunately it often coincides with major financial distress in markets, a recess or both.”

Bitcoin managed to rise in tandem with DXY, despite its traditional inverse correlation with DXY.

U.S. dollar index (DXY) 1-day candle chart. Source: TradingView

Inflation expected to bring “messy weeks”

As if that wasn’t enough, this week will be a test of market resilience with the old topic of inflation.

The June U.S. Consumer Price Index (CPI), readout is due July 13th. Expectations are that the monthly figure will be higher year-over-year.

Higher inflation and greater divergence from expectations will lead to higher risk assets reacting in anticipation of policymakers’ reaction.

Alex Krueger, macro analyst, sees this week’s likely course as clear.

He summarized it on Twitter: “Going to get messy.”

This week’s theme is CPI Inflation. The consensus is higher: 8.8% YoY, 1.1% Mom. My view is that the dips get bought and come in higher. #2 Earnings. This week, mainly financials. It should be fine. #3 European gas crisis. Euro and risk are under pressure. It’s going to be messy. https://t.co/LCmt2GRcHl
— Alex Kruger (@krugermacro) July 10, 2022

CPI, despite removing many of the most important inflation indicators, caught the attention mainstream commentators over weekend in a grim hint to the possibility that this week’s figures might put the cat amongst the pigeons.

Mohamed El-Erian, economist, said that the US CPI inflation print could be very close to 9.9% next week.

“Yes, but it captures the pain that many feel, especially the less fortunate; and influences inflation expectations.

A knee-jerk reaction could meanwhile spook Bitcoin markets along with other risk assets or spark major volatility as was seen during previous CPI events.

MACD suggests price bottom in progress

Multiple Bitcoin price metrics are showing that current Bitcoin prices have a historically high risk/reward ratio.

This week, the latest metric to join the herd is the moving average convergence/divergence (MACD) on the weekly chart.

MACD tracks a chart trend that is already in progress. This involves subtracting the 26-period exponentially moving average (EMA), from the 12-period EMA.

Bitcoin is more likely to bottom when the resultant value falls below zero. This means that Bitcoin’s recent $17,600 trip could also be a bottoming scenario if historical norms are repeated.

If the weekly MACD falls below zero, a #Bitcoin capitulation has always been the bottom. pic.twitter.com/5U1Q13Ybju
— July 10, 2022, dave the wave (@davthewave).

Matthew Hyland, commentator, noted that a similar MACD structure was still being observed on the 3-day chart.

Market analyst Kevin Svenson said that 3-Day MACD remains on a bullish cross.

“Despite the pullback I remain bullish for the medium term.”

Cointelegraph reported that Bitcoin’s relative strength (RSI), is at its highest “oversold” levels in history.

Last week, however, a trader identified July 15th as the key date for determining when another chart feature would call the bottom. This chart was composed of two MAs.

2 month highs in Crypto Fear & Greed Index

The latest data suggest that crypto investors are slowly gaining their confidence.

Similar: Top 5 cryptocurrencies you should be watching this week: BTC. UNI. ICP. AAVE. QNT.

Based on its previous strength, crypto market sentiment reached its highest level since early May, at 22/100, over the weekend.

Although still in “extreme Fear” territory, the Crypto Fear & Greed Index’s renaissance is a stark contrast to the events over the past two months when it dropped as low as 8/100 — well below any previous bear market bottoms.

Screenshot of Crypto Fear and Greed Index Source: Alternative.mecom. You should do your research before making any investment or trading decision.

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Eileen Wilson

Eileen Wilson –Technology and Energy My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.

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