The recent CPI data brought another hit to the BTC market, where Crypto brokers took a short position to sell off the BTC as the outcome of the inflation data from the Bureau of Labor outperformed the previous month’s release and fuelled a strong rise in US dollar demand. The price of BTC dropped nearly by 10% to retest the 20000-dollar zone. 

A close below the zone will bring another pressure to the Buyers in the market, but a rejection of the seller’s offer can pivot the bullish swing.

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BTCUSD: Technical Analysis

Monthly Chart

BTCUSD monthly chart - 16th Sept 2022

Monthly Resistance Levels:  35000, 40000, 25000.

Monthly Support Levels:   17500, 18500.

From the monthly chart, you can see that the price of bitcoin is trapped between the lowest low of a 17000-dollar level and the high of a 25000-dollar level in the past few months. The Bearish momentum stills overshadow the crypto market, as the year’s trading activities show that the market has been in a strong bearish state from the monthly chart.

Weekly Chart

BTCUSD weekly chart - 16th Sept 2022

Weekly Resistance Levels:   $25000, $4500.

Weekly Support Levels:    $18500, $17000.

The CPI report is a major indicator for the crypto brokers and institutions because the rate of inflation in the US will reflect on the BTCUSD pair when the data is out. The projection is that if the inflation data should come out lower than the previous month’s expectation, it will profit the bitcoin asset.

The objective of the Fed is to bring the inflation rate to a 2% target which crypto brokers and traders are putting into consideration a possible 80% possible 75-bp rate hike at the next meeting and a 20% chance of the Fed lifting its overnight lending target rate by 100 Basis points according to reports from CME’s Fed Watch tool.

The Bulls will hope to break out of the $25000 resistance level this week if the CPI data can be lower than the previous outcome which will bring about the bullish run in the bitcoin market.

From the weekly chart, the bear’s dominance is still seen overall, but the Bulls are trying to push the price higher above the previous week’s candlestick. However, the CPI report will direct the sentiment of the market. 

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Daily Chart

BTCUSD 2022 09 07 19 31 27

Daily Resistance 24200K, 22000K.

Daily Support 18000K, 17000K

The BTCUSD pair reacted swiftly to the outcome of the core CPI data as the price of bitcoin dropped sharply after the number of CPI came out disappointing with about 4.2% drop from the opening of the US session after the news was released.

The Bulls are holding to the support level for another bounce to the upside after the disappointing data. We could see that the moving average of 50 and 100 acted as a resistance to the price of bitcoin on the daily chart. A close above the moving averages will bring a significant change in the bias of the market.

Investors and crypto brokers would want the support level of 18000-20000 to hold to bring relief to the market as the price of bitcoin retests the zones again.

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Bullish Scenario:

The Bulls will need another momentum in the market to push the price of bitcoin up from the 17500 zone if they can dominate the market by rejecting the Bear’s attempts. Crypto brokers need good fundamentals in their favor to rally the price up.

Bearish Scenario:

The bears need a breakout below move for the bearish swing to turn the market into another bearish drive if it can close below the 17500 level. Recently, the Bears took advantage of the resistance level of 22000 level to push back the Bull’s gains, a close above the zone will weaken the Bear’s momentum.

Bitcoin BTC News Events 


Report from a popular crypto site shows that the bitcoin miners have recorded a negative miner net flow in August and it’s the fourth consecutive month of net flows since May’s crash on mining. In August, the net outflow was 21.3K BTC according to reports and most Bitcoin miners have to resort to selling just to sustain themselves throughout August.

This year’s crash was not expected to last this long by the bitcoin miners and it is not looking like the crash will be over soon. However, bitcoin miners took advantage of several small swings to the upside to book profit as means to survive.  The public miners who took advantage of the 2021 bullish run were able to stack up a massive stash of BTC at that time. Due to the Bearish state of the market, they are running out of coins to sell because of the downturn of bitcoin in the crypto market.

Some bitcoin mining firms like Stonghold have had difficulties during August operations, and they recently announced their agreement with the Lender New York Digital Investment Group (NYDIG) and a broker for a plan to return above 26000 miming machines for an exchange to cancel a debt above $67 million.

That report shows that bitcoin Network Activity is on a mild recovery as bitcoin transaction volume rose by 10.5% to $2.39 trillion the number of active addresses increased by 4.47% to above 910K and the number of new addresses rose to 3.10% to above 390K. The number of transactions increased by 1.80% to about 77.80 million, and monthly fees dropped by 27% to 410 BTC meaning that the average transaction fee falls from 28.2% to 5190 Satoshis. The miner’s data shows a gloomy picture compared to the bitcoin network activity.

Conclusion and Projection

The psychological level for the BTC/USD pair is the 17000 level for some prominent figures in the crypto market. They share their thought that if the bitcoin asset will continue to rise, it must not close below the zone, or it will fall to the 10000-dollar level. We expect the Bulls to dominate the zone for the price to rise. 

With this disappointing CPI, the Fed will continue to tighten the monetary policy and is likely to increase the interest rate by 100bp as expected by crypto analyst.

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This article will not be giving advice for investment. It is strictly for educational purposes. Please consult your financial advisor when trading on leverage instruments, as we will not be liable for any losses incurred. Your capital may be at risk

John Walker

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