Bitcoin traders are anticipating increased volatility in the BTC price as the United States Consumer Price Index (CPI) is set to hit its lowest level since March 2021. With liquidity tightly wrapped around the spot price, analysts hope for a reshuffle in the market dynamics following the release of the June CPI print.
The expected CPI figure of around 3.2% indicates a continued slowdown in U.S. inflation. Various indicators, including the Cleveland Fed, University of Michigan, and Truflation, anticipate a similar number. However, traders are cautious about flash volatility, as Bitcoin tends to determine its trajectory shortly after the data release. This often results in a ‘Darth Maul’ candle, where both high and low levels on lower timeframes are breached before the real direction for the day is established.
Analysts have observed a pattern in previous CPI data releases, where Bitcoin experiences volatility in both directions to liquidate positions before reverting back to its pre-release level. Some traders anticipate that Bitcoin’s price may target either the $31.1K or $30.2K level after the initial volatility subsides.
On longer timeframes, there are discussions among traders about the potential for a classic bull run. The BTC/USD monthly chart is showing signs of breaking out above its 20-period simple moving average (SMA). Historically, whenever Bitcoin closed a month above the SMA 20 line, it signaled the confirmation of a bull run. Notably, during the following two years, Bitcoin maintained a position above this line, except for the COVID-19 crash. This development has led some traders to believe that the current situation looks favorable for a potential bull run.
Disclaimer: This article does not provide investment advice or recommendations. Readers should conduct their own research and consider the risks associated with every investment and trading decision.