Macro environment – The bulls have once again fed off inflation to try to take back the $ 50,000, but they must prepare for facing bears spiked by the US Federal Reserve (FED) next week.
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Bitcoin and inflation: monitoring tapering rather than the CPI
Bitcoin does a foray above $ 50,000 today, December 10, 2021. The bulls still lack the strength to keep bitcoin above this token level, but they are currently trying to defend the $ 48,000. Bitcoin is trading at $ 48,265 at the time of writing, and is posting a daily gain of 1.16%.
Markets appear to have reacted favorably to the release of US inflation figures, although the 2.5% push to dip above $ 50,000 was short-lived. The Consumer Price Index reached 6.8%, year-on-year, i.e. 0.8% more than in November 2021. This figure represents a highest over 39 years.
For the Pentoshi trader, the macro event that will have to be really watched given its major impact on the price of bitcoin, will rather occur next week. The Federal Open Market Committee, which is a branch of the US Federal Reserve, will provide guidance on the decrease in asset purchases by the parent institution.
The FED wants to send a signal as to his desire to regain control of inflation. A drop in asset purchases by the Fed would theoretically exert downward pressure on risky assets like bitcoin which are considered hedge assets.
Deja vu for bitcoin: crash before ATH for bulls
Can Bitcoin really rise again after this umpteenth $ 42,000 crash? Bitpanda’s Product Manager Lukas Enzersdorfer-Konrad believes bitcoin’s drop from $ 69,000 to $ 42,000 is similar to the crash of May 2021. Bitcoin’s price collapsed by 50%, before reaching a new all-time high:
Bitcoin is volatile, according to Enzersdorfer-Konrad, on a daily basis. He stays bullish on higher timescaless :
“The bitcoin market needs some time to recover in these situations, and the intraday charts are still volatile, but it is still bullish on the upper time frame. “
Will the Fed actually succeed in exerting lasting downward pressure on the price of bitcoin, with the gradual reduction in its asset purchases? This Bloomberg analyst continues to place bitcoin at $ 100,000 in 2022.
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