Bitcoin CPI Highs See Warnings Of Bull Trap Next

Key points:

• Bitcoin nears three-week highs as US CPI data matches expectations.

• Plenty of market participants see Bitcoin heading higher as aresult, perhaps after a dip to trap late longs.

• CPI has seen BTC price fakeouts in recent months.

Bitcoin (BTC) saw telltale volatility at Thursday’s Wall Street open as US macro data furthered interest-rate cut odds.

BTC/USD one-hour chart. Source: Cointelegraph/TradingView

CPI bullseye sees calls for Bitcoin going “higher”

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD spiking to $114,731.

The August print of the US Consumer Price Index (CPI) came in as expected, complementing a marked cooling of the Producer Price Index (PPI) the day prior.

US CPI 12-month % change. Source: US Bureau of Labor Statistics

While CPI was at its highest since January, the headline figure was instead initial jobless claims, which saw their largest numbers since October 2021 at 263,000 versus 235,000 expected.

Amid ongoing concerns about labor market weakness, bets of the Fed cutting rates at its Sept. 17 meeting only strengthened after the CPI release, with markets even seeing an 11% chance of the cut being more than the minimum 0.25%.

“Markets are now pricing-in 75 basis points of rate cuts by year-end,” trading resource The Kobeissi Letter noted in a follow-up thread on X. 

Fed target rate probabilities (screenshot). Source: CME Group FedWatch Tool

Crypto commentators saw the case for higher prices next as Bitcoin passed $114,500 for the first time since Aug. 24.

“PPI much lower than expected, CPI as expected,” popular trader Jelle responded in an X post. 

BTC price risks repeating US inflation data trap

BTC price forecasts also stressed the importance of recent support reclaims.

Related: Bitcoin price can hit $160K in October as MACD golden cross returns

For fellow trader BitBull, flipping $113,500 from resistance to support was the key low-time frame event, which opened the door to a rematch with all-time highs.

Some perspectives nonetheless saw a fresh support retest coming before a return to price discovery.

Trader Skew argued that the market would attempt to trap and liquidate longs that entered on the CPI release.

“One more liquidation before higher,” part of an X post suggested, noting 2,000 BTC of liquidity appearing on exchange order books.

BTC/USDT order-book liquidity data. Source: Skew/X

Crypto investor and entrepreneur Ted Pillows went further, suggesting that BTC/USD would copy previous CPI behavior to first rise then plumb fresh lows.

“In the last 3 CPI data releases, Bitcoin rallied before CPI data and dumped right after the data release,” he observed alongside an explanatory chart. 

BTC/USDC one-day chart. Source: Ted Pillows/X

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Source: https://cointelegraph.com/news/bitcoin-eyes-115k-cpi-data-traders-diverge-on-new-btc-price-dip?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound