Are cryptocurrencies reacting negatively to inflation data from a technical perspective?
With less than the first weekend following the announcement of inflation data in the United States, the cryptocurrency market has reacted negatively to the encouraging data, which left a positive taste as inflation started to ease.
According to official data released the April CPI showed that the rise in prices fell to 4.9% year-on-year, down from the 5% recorded in March, below the consensus estimate.
While that 4.9% reflects nothing as there is no clear picture with real signs that the situation is improving, traditional markets reacted positively while the cryptocurrency market for its part gave ground.
For some analysts from a technical perspective, we are seeing a positive reaction. But in reality, the action is somewhat insignificant in terms of where both Bitcoin and Ethereum have traded lately.
Now, for bullish traders this is a new correction so there are no conditions to worry about, and they believe that the recently announced inflation data could steer Bitcoin towards the important support it presents at $25,000, although it still sees a medium-term uptrend.
From my perspective, he believes that the pullback in price action experienced by cryptocurrencies remains moderate, so, in the coming weeks we may see a price rally that will restore calm and confidence in the market.
SOURCES CONSULTED
Bolsamania. Bearish turn in cryptocurrencies: is bitcoin headed for $25,000?. Link
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The cover image was designed by the author: @lupafilotaxia, incorporating image: Bolsamania
Hi @lupafilotaxia
Even if inflation is going down, at least that is what can be seen in data, the reality is that there are other data such as "Consumer Confidence", or the unemployment rate, that need to be evaluated.
I think the FED will continue to raise interest rates, and that's why the crypto market reaction.
And in general, the market has responded to the downside. For example, the indices (us30, sp500, Nasdaq100) have gone down.
It is still a wait and see situation.