November CPI data sparks a rally in the crypto market, pushing BTC above $17700

Crypto MARKET_WATCH

The wider crypto market enjoyed a boost in token prices on Tuesday after the latest Consumer Price Index (CPI) reading came in at 7.1%, hinting that inflation continues to moderate in the face of rising interest rates by the Fed and other central banks.

The CPI news sparked a rally across traditional markets, but the momentum faded as the day progressed. Reality set in that while inflation may be moderating, it is still more than three-times higher than the Federal Reserve's long-term target of 2%.

 

 

At the close of markets in the U.S., the S&P, Dow and Nasdaq all finished in the green, up 0.73%, 0.30%, and 1.01%, respectively.

Data from TradingView shows that Bitcoin (BTC) bulls used the positive CPI news to push its price higher, hitting a daily high of $18,200 during the morning session before pulling back to support near $17,760, where it traded for the remainder of the day.

 

The move higher pushed the top crypto to a four-week high, according to Kitco senior technical analyst Jim Wyckoff, who added that “Bulls have gained the near-term technical advantage.”

 

“Today’s price action has produced what looks to be the beginning of a bullish upside “breakout” from the choppy and sideways trading range on the daily bar chart, to suggest a price uptrend will develop,” Wyckoff concluded.

 

Prepare for more volatility tomorrow

 

Prior to the CPI announcement, analysts at Arcane Research warned that “this week could be volatile due to several important economic events.” After the CPI was revealed, sending asset prices higher, they subsequently warned that “Tomorrow’s FOMC will likely cause a sharper market reaction.”

 

“In addition to the nearest hike, clues provided by Jerome Powell regarding the forecasted hiking schedule for 2023 will likely contribute to causing a volatile environment,” the analysts said. “Also, the BoE and ECB will hike interest rates this week, which may have spill-over effects on bitcoin as it may directly impact dollar strength.”

Insight into what the price action for Bitcoin may look like moving forward – if the actions from the Federal Reserve align with investors' expectations – was provided by Eight Global founder Michaël van de Poppe, who posted the following tweet highlighting the overhead resistance levels at $17,800 and $18,200.

 

Caution is still warranted, however, as multiple experienced crypto traders posted warnings that more downside was still a possibility, including the well-known crypto analyst il Capo of Crypto.

 

Altcoins trend higher

 

Following the early morning CPI announcement, the majority of altcoins trended higher on the day as investors regained their appetite for risk and reentered the market.

 

Daily cryptocurrency market performance. Source: Coin360

The most notable gainers on the day include a 19.16% increase for Siacoin (SC), a 12.25% gain for MXC (MXC), and a 12.04% increase for Toncoin (TON).

The overall cryptocurrency market cap now stands at $867 billion, and Bitcoin’s dominance rate is 39.3%.

 

Source : November CPI data sparks a rally in the crypto market, pushing BTC above $17700

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