Bitcoin Surpasses $18.000 as Crypto Market Recovers

Bitcoin Surpasses $18.000 on Crypto Market Recovery - b 5fe2b43bf3Bitcoin (quotation BTC) has rallied ahead of the release of December US consumer price index (CPI) data. The pioneering digital currency is currently trading at around $18.180, up 4,21% in the past 24 hours.

The surge comes as pundits have predicted that inflation data could lend credence to claims that inflation is easing. Reuters reports that December CPI data is expected to come in at around 5,7% when it is released on January 12th. The figure will be a slowdown from the 6% recorded in November and will bring monthly inflation to zero.

This data is considered a significant indicator for investors trying to predict future market direction. On the one hand, in fact, it gives hope that the Federal Reserve Bank of the United States will continue to slow down interest rate hikes.

“…it is inevitable that today's US CPI will be able to influence next month. The latest releases saw two CPI downside surprises in a row for the first time since the pandemic, which raised hopes that the Fed could land a soft landing.Deutsche Bank strategist Jim Reid wrote.

Previous announcements of hikes in CPI and interest rates have had major effects on the BTC market. The most significant was the September rally, followed by a 10% decline in the BTC price.

In a tweet, pseudonymous cryptocurrency analyst Cantering Clark pointed out that there is already an interesting relationship between BTC and CPI right now. The market traded higher in anticipation of the CPI announcement. It could then sell following the announcement. This is one of several patterns the analyst notes.

Will BTC continue to recover in 2023?

However, some cryptocurrency analysts still have reservations about what to expect from the CPI data. Market commentator “CryptoGodJohn” warned that market participants should beware of “bull posting”. While admitting that inflation could fuel BTC to around $19-$20k, she noted that if expectations are wrong, traders could suffer huge losses.

“I see an extreme amount of bull posting as $BTC sits below the higher time frame resistance at $17.600 and the CPI two days from now. I hope you are right as otherwise many of you will be rinsed hard”, he wrote in a tweet.

Similarly, market pundits are not confident that the Fed has been able to sustainably contain the inflation race that began in 2022. Michael Burry, the famous Big Shot investor, wrote that the current inflation peak is not the last of this cycle.

He also notes that the CPI is likely to decline until the US enters a recession. When that happens, the Fed will cut rate hikes and the government will stimulate the economy leading to more inflation.