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Bitcoin double top ‘invalidated’ amid fear CPI may fuel macro comedown

Altszn.com by Altszn.com
April 11, 2023
in Bitcoin
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Bitcoin double top ‘invalidated’ amid fear CPI may fuel macro comedown
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Bitcoin (BTC) got busy testing $30,000 as new support at the April 11 Wall Street open after hitting new 10-month highs.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

$30,000 surge decimates liquidity

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD coming down from an overnight peak near $30,500.

The pair had spent most of the day bouncing from the $30,000 mark after finally passing it in a short squeeze weeks in the making.

Major misgivings from some market participants accompanied the move, with fears centering on a potential correction to $25,000 or even lower.

Takes became more optimistic on longer timeframes, however. The $30,000 push, for instance, cemented popular trader and analyst Rekt Capital’s conviction that Bitcoin had abandoned a bearish double top formation from Q1.

“The signs for distortion of the BTC Double Top were there,” he wrote in a Twitter thread update.

“$BTC has invalidated the Double Top and confirmed a breakout to new Yearly Highs.”

BTC/USD annotated chart. Source: Rekt Capital/Twitter

Continuing, Rekt Capital spelled out the conditions required to be met on daily timeframes to continue the bullish momentum.

Related: Crypto audits and bug bounties are broken: Here’s how to fix them

Analyzing the composition of the Binance order book on the day, meanwhile, monitoring resource Material Indicators suggested that the odds of continued upside remained good.

“After the push above $30k, BTC liquidity is diffused in both directions,” it explained in part of it commentary.

“There are no massive buy/sell walls, in fact the so called walls that appear on FireCharts are rather thin. Bullish momentum is growing so we could see a push higher.”

BTC/USD order book data (Binance). Source: Material Indicators/Twitter

CPI lurks as volatility catalyst

The general mood was mixed with apprehension, thanks to macro catalysts waiting in the wings for the rest of the week.

Related: Bitcoin ‘faces headwinds’ as US money supply drops most since 1950s

The United States Consumer Price Index (CPI) print for March will be released on April 12, with Producer Price Inflation (PPI) following on April 13.

With both events known to induce risk asset volatility, Material Indicators acknowledged that an “explosive move” may result for Bitcoin this time around.

“Wed CPI and Thu PPI Reports could trigger a more explosive move. If numbers are hot, expecting a correction,” it added.

Markets commentator Holger Zschaepitz nonetheless flagged the highest levels of shorting the S&P 500 since 2011 ahead of the CPI release.

As Cointelegraph reported, the correlation in volatility between Bitcoin and equities has cooled significantly.

Analytics account Tedtalksmacro added that “traders are likely to risk-off into the event” when it comes to the CPI.

“Risk that a hot print forces market-wide repricing,” part of a post read as Bitcoin passed $30,000, noting for BTC/USD that there were “signs of froth up here, perps leading price higher and plenty of large spot offers have been lifted.”

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.