According to respected cryptocurrency analyst Michaël van de Poppe, Bitcoin has been displaying signs of weakness recently, which he attributes to investor uncertainty ahead of the upcoming CPI data release.
Van de Poppe notes that Bitcoin often sees selling pressure leading up to major economic data announcements like CPI. With Bitcoin having lost support around the $27,500 level, van de Poppe believes further downside is likely, with a potential target of $26,800.
The CPI data is released monthly by the US Bureau of Labor Statistics. It tracks the change in prices paid by consumers for a basket of goods and services, including things like food, housing, transportation, medical care, recreation, education, etc.
The CPI is closely watched by investors, analysts and policymakers because it is a key indicator of inflation trends in the economy. Rising CPI indicates increasing inflation, while decreasing CPI signals disinflation or deflation.
Major CPI data releases often lead to increased market volatility, as traders react to the latest inflation trends. Unexpected CPI increases or decreases can significantly impact asset prices, especially for inflation-sensitive assets like stocks, bonds and commodities.
#Bitcoin acting weak.
— Michaël van de Poppe (@CryptoMichNL) October 11, 2023
Why?
Well, CPI comes around and that's usually a moment where we'll be finding some weakness prior to the data point.
Preferably, as we lost a support level, I think we'd be dropping towards $26,800 area.
Placing some bids there in case of HL. pic.twitter.com/sjH8hFdyiO
So in summary, the upcoming CPI data release that van de Poppe refers to is the monthly Consumer Price Index report that will provide critical insights into current US inflation dynamics. Investors are anticipating its impact on financial markets. He recommends traders consider placing buy orders around the $26,800 level in anticipation of a bounce higher (HL).
At present, Bitcoin is trading around $27,000, down about 2.2% over the last 24 hours, while the overall crypto market cap stands at $1.05 trillion, also down roughly 2% on the day.
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