The level of inflation in the United States for last month is scheduled to be officially announced tomorrow, Thursday at 17:00 Tehran time. Experts believe that changes in inflation in the United States may be a tool for determining the direction of further fluctuations in the price of bitcoin and digital currencies.
According to the Coin Telegraph, the price of bitcoin peaked at $ 42,100 a few hours ago, and it turns out that buyers of this digital currency are pushing price support levels to higher levels.
As can be seen from the chart above, the sudden increase in buying pressure to the level of $ 39,600 pushes the price to its current level by almost 11%. The price reached its peak today on the Bitstamp digital currency exchange at $ 42,438. Traders’ sentiments are also gradually improving, but their conservatism is still evident.
There are currently a number of macroeconomic factors that could affect the price of bitcoin and digital currencies, including the Russia-Ukraine conflict, last month’s US inflation rate and Biden’s executive order for digital currency legislation. Obviously, the general nature of this command is positive and in favor of digital currencies. These factors are one of the main reasons why experts are cautious in their comments.
Michael van de Pope, a digital currency analyst and author of the Kevin Telegraph website, said:
There is no denying that market conditions look a little better today after the jump. However, this situation is still very fragile, fleeting and uncertain.
Pentoshi, another popular analyst in the digital currency market on Twitter, is optimistic about today’s jump and says the move has brought bitcoins back to the top of the channel, where the price has remained since early 2022.
The analyst posted the above image on his Twitter:
If the $ 40,700 support is maintained in the 1-day and 3-day market views, the price will reach the beginning of 2022 for the third time. The previous move that led to the jump to this level was from the blue zone [روی نمودار] It had begun. Both times before, the upward trend did not last long. This time, however, maintaining $ 40,700 in support can be exciting. Interrupting the $ 40,700 support will not work well, but if this level is maintained, the next target will be the cost of converting $ 46,000 to the next support and jumping to $ 52,000 and $ 53,000.
William Clemente, who works as a statistician at Blockware, says the jump was an attractive move today, but in the end, to make sure the price accelerates again, bitcoin needs to be within the 46% resistance range. Cross between $ 2,000 and $ 47,000.
The statistics on monthly inflation in the United States, which should be published tomorrow, keep the market of expert forecasts hot. Inflation is expected to be 7.9% in February; An important factor that can determine the volatility of bitcoin.
The significance of the inflation rate for this month is due to the fact that in the coming weeks a meeting is scheduled in the US Federal Reserve to decide on raising the bank interest rate, and experts are discussing the periodic increase in this rate.
PlanB, the creator of the famous S2F model, says:
I think the first drop in bitcoin from $ 60,000 to $ 30,000 in 2021 is due to a ban on digging for digital currency in China. The second drop, which shifted prices from $ 60,000 to $ 30,000, was caused by rising US inflation and the possibility of higher bank interest rates, as well as the end of the US Federal Reserve’s expansionist policies. At present, however, the possibility of raising bank interest rates and eliminating expansionist monetary policies seems unlikely.
Expansionary monetary policy is a method in which the central bank increases money supply in the market by buying government bonds or other financial products to accelerate economic growth. As the money supply increases in this way, inflation increases and the prices of goods and services in the country rise. In contrast, there is a shrinking monetary policy that mainly affects the economy by raising bank interest rates and reducing the central bank’s balance sheet.
Thus, rising inflation this month could encourage the US Federal Reserve to adopt shrinking monetary policy and raise bank interest rates; A move that experts say would be detrimental to the price of risky assets such as digital currencies.
Fasting 24 important hours for the market; Reducing inflation in the United States may be the next good news for bitcoin, which first appeared in the digital currency.