Bitcoin Price Analysis: BTC Faces Resistance Despite Positive Inflation Report

Despite a positive US inflation data, Bitcoin price failed to overcome a critical resistance level on Thursday, making it a pivotal day for the cryptocurrency markets. The report, which revealed the first drop in consumer prices in four years, initially lifted investor confidence and led to further bets on a possible rate cut by the Federal Reserve. Higher-risk assets, such as Bitcoin, saw a temporary increase as a result.

BTC bulls were initially optimistic, but they were unable to break above the descending trend line that marked the sell-off from June highs near $72,000. Early today, prices turned negative and fell below $57,000 as optimistic hopes were dashed by the inability to break past the barrier.

With good macroeconomic statistics in the background, the recent failure of the bull market makes it more likely that prices will fall even more. After a similar rejection at the trendline on July 1st, there was a larger selloff. This shows that the market is still sensitive to levels of resistance.

The Labor Bureau releases CPI data

The Bureau of Labor Statistics publishes the consumer price index (CPI) figures. They demonstrate how prices for various goods and services have evolved over time. The CPI rose 3.0% in the fiscal year ended June 30, slightly less than the 3.1% increase predicted by analysts. In June, there was a monthly drop of 0.1% in inflation, which was the first since May 2020. This came after May’s flat reading.

Following the announcement of the CPI numbers, Bitcoin had a temporary recovery from its previous four-month low, rising above $59,000. In a 24-hour period, the alpha coin lost a lot of steam and retreated to the critical $56,600 field, a loss of 0.8%. Even in light of the exciting inflation narratives, market dynamics are still complicated.

Germany Finishes Downloading Crypto

The German government is close to completing its protracted Bitcoin liquidation procedure, which is a notable milestone. Earlier in June, the country held 50,000 BTC; at current market values ​​it is worth about $2.8 billion.

Since June 20, German investors have moved billions of dollars worth of Bitcoin to prominent cryptocurrencies including Kraken, Coinbase and Bitstamp, wealth management company Cumberland, and more addresses believed to be associated with institutional or over-the-counter trading banks. The German government’s wallets have just 4,925 BTC, or about $284 million at current rates, according to Arkham Intelligence’s chain statistics.

The government started the outflows at a slow pace this week, but they quickly picked up steam, with $900 million leaving its coffers on Monday alone. As of Wednesday, the German government owned less than $1 billion worth of Bitcoin. Most analysts believe that since these coins have been sent to trading platforms, they are being sold on the market, which has contributed to the selling pressure that has affected the price of Bitcoin in recent weeks.

What is in Texas?

Texas’ electricity system is under unprecedented stress as the state battles an endless heat wave. The importance of Bitcoin mining to keep the grid stable during this energy crisis is becoming more and more known. Gryphon Digital Mining CEO Rob Chang and host Rob Nelson spoke at a recent roundtable about the challenges and potential solutions presented by Bitcoin mining.

Nelson highlighted the heat wave’s devastating effects on Texas’ electrical grid while pointing to Bitcoin mining’s special ability to maintain and balance the system. He underlined: “No other business has such flexibility as Bitcoin’s ability to move electricity to a large power grid and withdraw it in almost no time.”

Chang countered that Gryphon Digital Mining is deliberately staying out of Texas because of the intense heat, which would require frequent equipment shutdowns for mining. However, he conceded that Bitcoin mining significantly improves the electrical grid. According to Chang, “Bitcoin mining facilities function as peaking plants, transferring electricity to the grid as needed.” Because of this flexibility, Bitcoin miners can be shut down during times of high demand, freeing up electricity for the larger network.

Biden is encouraged to support cryptocurrency

A DC-based tech industry association called The Chamber of Progress is pleading with President Joe Biden to support bipartisan, pro-crypto legislation to win over more young voters, given that more than 18 million Americans are currently investing in cryptocurrencies.

The Chamber of Progress is pleading with the Biden administration to support comprehensive regulation of cryptocurrencies ahead of a Bitcoin roundtable this month, citing the critical point in the US election cycle. Millennial and Gen Z voters, who are more interested in digital assets, are the target audience for this move, which seeks to protect their votes.

In a letter to President Biden on Tuesday, the coalition said, “More than half of those age groups favor a federal policy that promotes the use of digital assets in the United States.” According to survey data provided by the Chamber of Progress, one in five voters view cryptocurrency laws as an important voting issue in the 2024 election, and more than half of voters think greater restrictions are needed on the cryptocurrency industry in the United States.

Kiyosaki: Get more BTC

In an effort to “turn a terrible hand into a tremendous hand,” renowned investor and author Robert Kiyosaki once again pushed investors to buy more Bitcoin and precious metals like gold and silver.

While it was unclear which market sector Kiyosaki was referring to as the “bad hand,” given the recent rise in stock prices, it’s likely that his comments were aimed at Bitcoin, which has seen a sharp drop in value recently.

Although safe haven products such as gold and silver are usually associated with it, many individuals who embrace Bitcoin also see the digital currency in this sense. Kiyosaki’s advice reflects a long-term hopeful perspective of Bitcoin and precious metals as shields against economic volatility.

The movement in Bitcoin prices

The value of bitcoin rose by 1.3% to $58,137 in the past day. The excitement surrounding the release of several exchange-traded funds drove the token’s price to a record high of nearly $74,000 in mid-March; yet it declined after that.

At the moment, Bitcoin is stabilizing below the important support zone of $58,516–$60,155 after a recent price drop below these levels. Decline in buying pressure indicates a noticeable drop in optimistic activity, keeping the price within a limited range.

Although it has not yet started a significant move, the relative strength index (RSI) is striving to rise from the lower level. This suggests that the price of Bitcoin is most likely range-bound until it crosses the major barrier at the 200-day moving average (MA) of $58,761. Should these targets be met, bitcoin price could re-enter a positive range and exceed $60,000.

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