Recently at the FOMC meeting, the Federal Reserve took a soft approach to interest rate hikes as there was only a 0.25% interest rate hike in instead of 0.50%. Today, traders and investors had hoped that there would be a drop in the inflation rate in January.
This positive anticipation had led to a slight rally in the market as the world’s leading cryptocurrency, the price of Bitcoin, regained its lost zone of $22,000. Therefore, the reverse price action of Bitcoin has also influenced other cryptocurrencies.
On the contrary, according to reports, the CPI data for January came in at 6.4% while the expected data was 6.2%. Moreover, the JP Morgan analyst had claimed that even if the crypto market rallied after positive CPI data, the rally would not last long. If the market turns out to be in line with JP Morgan’s analysis, it will most likely be another news buying event.
Bitcoin trend reversal coming?
Just before the Consumer Price Index (CPI) data for the month of January was yet to be released, the crypto market was slightly bullish. Additionally, due to positive inflation data expected, even the US Dollar Index (DXY) as well as the S&P 500 and Nasdaq are trading positive.
Now, higher than expected CPI data has had Bitcoin hovering between $21,900 and $22,000. However, according to the data, Bitcoin is now trying to form a bear trap pattern. A bear trap pattern is nothing but a downward move with an overall bullish move. If this turns out to be true, Bitcoin could soon approach the $25,000 mark.
Overall, the inflation data is still positive, which could lead to the opposite action for Bitcoin. If Bitcoin is to move towards its positive trend, Bitcoin price must break through its first major resistance of $22,500 and then its $23,000 level. As of this writing, Bitcoin is selling at $21,994 after rising 2.16% in the past 24 hours.