On Cusp of Major Bullish Breakout

Bullish View

  • Set a buy-stop at 24,600 and a take-profit at 25,500.
  • Add a stop-loss at 22,500.
  • Timeline: 1-2 days.

Bearish View

  • Set a sell-stop at 23,450 and a take-profit at 22,000.
  • Add a stop-loss at 25,000.

The BTC/USD price jumped in the overnight session as the market reflected on the latest US inflation data. It crossed the important resistance at 24,000 for the first time since last week and is about 35% above the lowest level this year.


US Inflation Data

The BTC/USD price jumped sharply as investors reacted to the latest US consumer price index numbers. According to the Bureau of Labor Statistics (BLS), the country’s consumer price index declined from 1.3% in June to 0.0% in July. This decline was smaller than the median estimate of 0.2%. It then translated to a year-on-year increase of 8.5%, which was lower than the expected 8.7%.

Further data showed that the country’s core inflation dropped from 0.7% to 0.3%, which was lower than the expected 0.5%. On a YoY basis, this inflation remained unchanged at 5.9%. The two figures were still bigger than the Fed’s target of 2.0%.

Therefore, analysts believe that the Fed could start slamming its brakes on hiking interest rates since inflation has started to drop. They expect that it will hike by 0.5% in September followed by 0.25% in the final two meetings of the year.

The BTC/USD pair rose after the report because of the significantly weaker US dollar. The dollar index dropped by more than 1.25% to $104.93. At its peak this year, the index was trading at $109.30. Similarly, America’s short-term bond yields slipped, with the 10-year falling to 2.788% and the 5-year dropping to2.9%.

Meanwhile, other assets also continued their comeback. Gold soared to the highest point in months while American indices like the Dow Jones, Nasdaq 100, and the Russell 2000 rose by more than 1.50%.

BTC/USD Forecast

The four-hour chart shows that the BTC/USD pair dropped to a low of 22,724 on Wednesday. This was a notable level since it was along the ascending trendline shown in green. It then bounced back after the US published weak inflation numbers. The pair has moved above the 25-day and 50-day moving averages while the MACD has moved slightly above the neutral point.

The pair will likely have a bullish breakout in the coming days. This view will be confirmed if it manages to move above the upper side of the ascending triangle pattern at 24.400.


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