Bitcoin on rampage despite hot CPI data

Price action suggests that the bulls may be able to challenge the 200-day and 50-day EMAs if the price remains above $58K.

Further evidence for a move toward the $60.3K resistance level comes from a break above the 50-day EMA. It is essential to consider U.S. economic data, opinions regarding the Fed’s rate path, and trends in the flow of BTC-spot ETFs.

On the other hand, the $52.8K support level might be reached if the price breaks below $55K. Bitcoin could drop below $55,000 before entering oversold territory, based on a 14-day RSI reading of 48.23. CryptoQuant’s most recent report indicated that investors have withdrawn their money from trading platforms, thereby alleviating immediate selling pressure.

CryptoQuant’s outlook suggests that past increases and new peaks often follow such transfers out of exchanges. According to CryptoQuant, these factors might soon cause a significant shift in market sentiment, even though resources like the Fear and Greed Index are still in the “fear” zone.

Historical data also shows that October and November have been more bullish months for Bitcoin. This could lead to an inevitable breakout in Bitcoin’s price, potentially resulting in new peaks by the end of the year or the beginning of 2025.

This could be further influenced by the impending rate cuts in the United States and the upcoming presidential elections, especially if Donald Trump wins. Conversely, spot exchange-traded funds (ETFs) for Bitcoin in the U.S. saw a $43 million outflow on Wednesday, following two days of inflows, with a $54 million outflow from Ark Invest’s ARKB product being the main cause.

U.S. core inflation increased more than the market anticipated, rising by more than 0.3 percent in August, which bolstered expectations for a rate cut by the Federal Reserve in the coming weeks. As the U.S. presidential election approaches, Bitcoin (BTC) is still navigating a challenging landscape of both market expectations and technical difficulties.

The top cryptocurrency has shown resilience recently, fluctuating between $55,000 and $70,000 throughout 2024 despite increased mining difficulty and the fallout from its April halving event.

CoinWarz data shows that on Wednesday, the difficulty of mining Bitcoin increased by 3.5 percent to an all-time high. This rise indicates heightened competition among miners and presents new challenges for those trying to mint new bitcoins. Following April’s halving event, which cut mining rewards in half and initially caused a 10% decline in Bitcoin’s price, the difficulty adjustment has been significant.

“The outlook is extremely challenging for many miners — especially those at the higher end of the cost curve — right after the halving earlier this year,” said Christopher Bendiksen, lead researcher for Bitcoin at CoinShares, in response to the current situation. He cautioned that some miners might find it difficult to sustain positive cash flow.