Bitcoin (BTC) has returned to a resistance band stretching from $58,000 to $59,000. This horizontal resistance level is the key for Bitcoin to go higher. Can the number one cryptocurrency battle through, or will it be rejected?
Positive CPI data bolsters case for rate cuts
Bitcoin is no doubt influenced by the ebb and flow of the world economies. In the U.S., the year-on-year CPI inflation data came in low at 2.5%, which is just a 0.2% increase for the month of August.
The possible 50 basis points rate cut, to be announced on 18 September at the Federal Reserve FOMC meeting, is probably now off of the table, given that the CME Fedwatch tool is only giving this a 13% probability, compared to an 87% chance of a 25 basis point rate rise.
That said, there is a cumulative 125 basis points in rate cuts, predicted to take place by the end of this year. Therefore, the market will be expecting a lot of liquidity to enter the system in this last quarter, which should be good for risk assets like Bitcoin.
$BTC buying and selling
As far as the buying and selling of $BTC goes, the Spot Bitcoin ETFs saw a net outflow of $43.9 million in value. However, this is small beer in comparison with the huge sell-off of 30,000 BTC, worth around $1.7 billion, by Bitcoin miners. It also has to be remembered that the German government sold off 50,000 BTC not that long ago.
The Ali_charts X account posted the findings of the miner sell-off, and this was first reported in an article by U.Today. That said, the same X account reported on 10 September that 236,155 BTC, worth more than $14 billion, had been withdrawn from exchanges over the previous two months.
Can $BTC punch through resistance?
Source: TradingView
The short term chart for $BTC shows that the price is still battling with the $58,000 horizontal level. This is a band of resistance that reaches up to $59,000. If the $BTC price can punch through this resistance, and turn it back into support, this would be a big first step towards gaining the top of the bull flag again.
$59,000 is crucial resistance on monthly chart
Source: TradingView
Zooming all the way out into the big macro view of the monthly chart, it can be seen how the $BTC price needs to get above $59,000, which is showing as an extremely important resistance/support level. Currently, the price is under the resistance, but we are only halfway through the month, so there is still plenty of time to achieve this.
Observing the bottom of the chart, the Relative Strength Index (RSI) has entered a decision point. Moving within the triangle, this momentum indicator will either break up or down, and the end of the month will provide this data.
The RSI is in a down trend, so it is crucial that the indicator line starts to move back up. If it breaks to the upside, the Bitcoin bull market is back on, while if it continues to break down, there is some more trouble ahead.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
