BTC Weekly Prediction – Evaluating PPI’s Influence on Bitcoin’s Bear Market Rally

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  • BTC price kick-starts upsides from the falling wedge’s lower trend line following a 5-month stagnation.
  • Transaction data confirms $20,242 as the next obstacle, where around 5.2M addresses hold approximately 2.56 million Bitcoin at a loss.
  • Flipping support at $15,551 into resistance would invalidate the bullish case.

Bitcoin price displays a lucrative start of an upward move, though slow, following weeks of constricted consolidation. Multiple reasons support a continuation of this bullish stance, though market players should consider all potential scenarios.

PP1 and Its Influence on BTC Bear Market Surge

One potential risk facet for BTC price might be the interest rates decision by the United States Federal Reserve as it affects two factors pertinent to Bitcoin’s price – the US dollar value and borrowing costs. BTC price is in United States dollars.

That means increased USD value negatively impacts the crypto’s price & vice versa. Borrowing costs affect crypto as most cryptocurrency traders and investors use margins and loans to purchase crypto assets. Thus, an uptick in borrowing costs can negatively affect demand and price.

A primary macroeconomic data that will likely affect interest rate decisions by the Fed is the PPI (Producer Price Index), which gauges inflationary bias in wholesale goods or factor gate price changes. The release will come later today.

Experts predict a lower PP than last year’s 6.7% because of the move the Federal Reserve has already taken, rising rates several times by now. Meanwhile, the consensus anticipation is PPI at 5.9%. Anything beyond this figure will likely indicate steady inflationary pressures, and the Federal needs to keep hiking at a violent pace.

That will raise borrowing costs and strengthen the US dollar – pessimistic for cryptocurrencies. Thus, it might catalyze a slight drop in BTC price. Nevertheless, the brief dip might be a blessing if the BTC price secures footing around $16,450 and surge. Accumulating at this mark with anticipations of an uptick to $20K or $30K would generate maximum profits for sidelined players.

BTC Price & Its Optimistic Tale

Another signal is that the BTC price might rally from the asset’s conflict with momentum. While the BTC price has created several lower lows, the RSI (Relative Strength Index) contrarily formed higher highs. The absence of conformity shows waning downward momentum. Thus, this technical setup often welcomes trend reversals. In Bitcoin’s case, such a shift would favor bulls.

FXStreet highlighted this narrative weeks ago, and Bitcoin has gained 11.80% since. The trend should keep pushing BTC high until it nears the 2022 POC (Point of Control) at $19,089. It represents the highest BTC traded volume level, making it a challenging obstacle.

Overpowering this obstacle will allow BTC to target the psychological zones at $20,242, $25K, and $30K. While this bullish picture remains logical from a technical view, on-chain metrics suggest similar tendencies. IntoTheBlock’s GIOM indicates two critical obstacles for Bitcoin.

The $20,242 region represents a substantial resistance where around 5.2 million wallets that bought 2.56M BTC are out of money. Thus, a BTC price rally to this mark might encounter intensified selling momentum as some investors would offload to break even.

Meanwhile, the technical outlook indicates that flipping $20,242 will clear the path for extended upsides to $30K or higher. Though Bitcoin exhibits an optimistic technical outlook, market players should beware that BTC printed equal lows at $15,551, and market makers might target sell-stop liquidity beneath these swing lows.

That might see BTC revisiting the possible macro bottoms, stretching between $13,575 and $11,898. Surprisingly, the closes support in the GIOM extends from $16,622 – $9,735. Here, nearly 5M addresses that acquired 2.14M BTCs at a $12,750 average price are in the money. A dip into this region will offer an opportunity for these traders to buy more, supporting the potential it could offer a market bottom.

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