Bitcoin News: BTC Price Hits Key Resistance as U.S. Inflation Cools Down

This inflation-linked boost is pushing BTC once again above the $80,000 psychological threshold just a day after the token hit its lowest level since November 10 at $76,555.

Data from the U.S. Bureau of Labor Statistics indicated that the consumer price index (CPI) expanded by 2.8% last month or 10 basis points below analysts’ consensus estimate for this period.

Lower-than-expected inflation prints are bullish for cryptocurrencies as they raise the odds that the Federal Reserve could adopt a more dovish stance on interest rates.

Market participants are still concerned about the impact that Trump’s hostile measures on the trade front could have on prices.

This lower-than-expected inflation rate could appease some of those fears. However, it is still too early to draw conclusions as most of Trump’s trade decisions have not been fully implemented.

BTC Short-Sellers Wiped as Price Bounces

Trading volumes for BTC have retreated by 17.2% in the past 24 hours as the market recovers its composure after a few days of heavy selling. That said, sentiment readings are still heavily depressed as the Fear and Greed Index currently stands at 19, meaning that investors are still in “Extreme Fear” mode.

In a volatile market like this, trends can change quickly. Yesterday, over $800 million worth of long positions were liquidated in just 24 hours.

Just a day after, we are witnessing $260 million worth of short positions being flushed out of the system as a result of crypto’s latest bull run. BTC accounts for nearly 60% of that total as short-sellers expected a continuation of the downtrend.

The daily chart shows a textbook bounce off the $78,225 support level yesterday. This was BTC’s last line of defense to prevent a full-blown collapse to pre-election levels.

Could this be the market’s bottom? It is still too early to tell but momentum indicators are improving. The Relative Strength Index (RSI) just sent a buy signal after yesterday’s strong bounce while the MACD’s histogram shows steadily decreasing negative momentum.

To fully reverse its downtrend, BTC would have to break above the $91,000 level in the next few days. Trading volumes were still slightly below the average yesterday as the price bounced, meaning that this could still be a short-lived recovery.

Significant Gains Ahead for BTC If It Breaks Above $84K

Moving to the hourly chart, we can see how critical today’s session is to predict BTC’s next moves.

Bitcoin’s latest price action has formed a bullish ascending triangle that could lead to a break above the $84,000 resistance.

Although the price is retreating at the moment once it hits the top of this formation, the bullish bias continues unless BTC drops below $81K, at which point the uptrend will be invalidated.

Measuring the size of this triangle, a bullish breakout could result in significant gains of around 8.8% for the top crypto asset. Bulls have the upper hand if a bullish breakout occurs as this trade offers a 2.2 risk-reward ratio.

Meanwhile, a less ambitious long position would wait for a breakout and set a stop loss right below the resistance line as that price level will turn into support once (or if) BTC breaks loose.

That trade would also offer a 2.1 RR ratio using BTC’s next resistance level at $86,750 as the exit target and setting the stop price right below the $84,000 level.