Bitcoin double top ‘invalidated’ on fear that CPI could lead to macro slowdown
Bitcoin (BTC) was busy testing $30,000 as new support at the April 11 Wall Street open after hitting new 10-month highs.
$30,000 decimates liquidity
Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD came down from an overnight peak near $30,500.
The pair had spent most of the day jumping off the $30,000 mark after passing it in a short squeeze weeks along the way.
However, Takes became more optimistic on longer time frames. The $30,000 push, for example, cemented popular trader and analyst Rekt Capital’s belief that Bitcoin had exited a bearish double top formation from Q1.
“The signs of BTC Double Top distortion were there,” he wrote in a Twitter thread update.
“$BTC has invalidated the Double Top and confirmed a breakout to new yearly highs.”
Rekt Capital went on to specify the conditions required to be met on daily timeframes to continue the bullish momentum.
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Analyzing the composition of the Binance order book on the day, monitoring resource material indicators suggested that the odds for continued upside remained good.
“After push above $30k, BTC liquidity is spread in both directions,” it explained in part of the commentary.
“There are no massive buy/sell walls, in fact the so-called walls shown on FireCharts are quite thin. Bullish momentum is growing, so we could see a push higher.”
The CPI lurks as a volatility catalyst
The general mood was mixed with fear, thanks to macro catalysts waiting in the wings for the rest of the week.
Related: Bitcoin ‘faces headwinds’ as US money supply shrinks most since 1950s
The US consumer price index (CPI) for March will be released on April 12, with producer price inflation (PPI) following on April 13.
With both events known to induce volatility in risk assets, Material Indicators acknowledged that an “explosive move” could result for Bitcoin this time around.
“Wednesday’s CPI and two PPI reports could trigger a more explosive move. If the numbers are hot, we expect a correction,” it added.
Market commentator Holger Zschaepitz nevertheless flagged the highest levels of shorting the S&P 500 since 2011 ahead of the CPI release.
As Cointelegraph reportedthe correlation in volatility between Bitcoin and stocks has cooled significantly.
Analytics account Tedtalksmacro added that “traders are likely to risk into the event” when it comes to the CPI.
“Risk of a hot print forcing market-wide price reduction,” part of a post read as Bitcoin passed $30,000, noting for BTC/USD that there were “signs of foam up here, perps driving price higher and lots of big spot offers have been lifted.”
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