Inflation shows signs of cooling as Fed weighs next move. This was reported today by the CPI data. More on that in a bit.
Although the markets’ sentiment seems to be bullish long-term, there are a few indicators worth looking at.
FTX seems to be doing a comeback. Is that possible and how did the news affect the market?
Will Bitcoin continue its rally or we are yet to see a drop in price? Let’s dive in.
FUNDAMENTAL
A CPI report was published today. Before analysing how it can influence the markets let’s explain what exactly is the CPI – The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Consumer prices rose 5 percent in the year through March, a sharp slowdown from recent months. This is a significant relief much more has to be done to reduce inflation.
Financial experts state that inflation is still hot, which will lead the Fed to continue raising interest rates, increasing the likelihood of recession. But a recession could then spur the Fed to cut interest rates later this year, supporting markets.
Overall, the data did influence the markets. The S&P 500 rose in early trading, with analysts and economists offering differing explanations for the positive move.
BITCOIN
BTC reached a new high since the rally up. It is important to note that $30 000 is a psychological resistance to traders and not so technical. Even numbers tempt to affect the majority of people in a way that shifts their bias. However, it is exactly euphoria that makes traders take emotional decisions and that is why every high is a warning signal to what is next.
On Tuesday the price rose 3% before reaching the Consolidation area that was marked in the previous analysis. Since then Wednesday has been red for BTC, as the current price $29 940 will mark a lower high if price closes this way. A lower high means a more probable move to the downside.
The next are of support for BTC is between $29 300 – $29 000. This is the are where if reached it is likely that we will see a reaction from buyers to keep the momentum up. That makes the area preferable for a short-term entry. The CPI report caused volatile hikes in the BTC price. Hedge funds also offloaded long positions and that was shown by the big spikes downward.
The next resistance still remains the Consolidation area – $30 400 to $30 700. There is a big order block of selling orders that is still positioned $31 300 – $32 000. It is highly unlikely that we will see the BTC price above these levels without a new possibility to enter lower.
SOLANA
SOL marked a 20% rise in the last two days. The move was mainly caused by fundamental news from FTX. If you were wondering what caused the pump, here is the information:
“The bankrupt crypto exchange FTX has recovered $7.3 billion in assets. FTX will consider restarting its crypto exchange in the second quarter of the year” – FTX Attorney
These news are very positive for SOL as when FTX announced bankruptcy the currency took a major hit in price. Such moves are almost impossible to track and are news-driven.
Technically SOL has ripped of important resistance level and for the first time since the bear market the price has broken above 200MA on a Daily chart. That indicator might as well make accumulation in SOL look reasonable.
New zones have been marked for SOL. The next resistance is between $24.90 – $25.40. The current short-term price has indicated a Lower High as of now.
The next support level might not sustain as the price was driven mainly buy news – $23.50 to $22.90. The currency is one of great volatility right now and a sharp move can occur in any direction. That is why it is important to mark the needed levels and trade accordingly.
