The Bitcoin price is struggling as investors reflect on Wednesday’s House hearings. The BTC price is also retreating as the market waits for the upcoming US consumer inflation numbers scheduled for Friday. At the same time, the crypto fear and greed index is still in the fear zone of 29. The S&P 500 fear and greed index has moved from extreme fear on Monday to about 40.
US inflation data
On Wednesday, the chief executives at some of the leading cryptocurrency companies in the United States like Coinbase and Circle testified before a congressional committee. While some legislatures have in the past been critical about cryptocurrencies, the atmosphere was relatively friendly.
The two sides agreed on the need for regulations in the industry. Legislators believe that these regulations will protect customers. Crypto CEOs, on the other hand, believe that friendly regulations will lead to more participation among institutional investors. It is well known that many institutions have stayed in the sidelines because of the cloudy nature of regulations.
The next key mover for the Bitcoin price will be the American inflation numbers scheduled for Friday. These numbers will provide more information about whether prices are still rising or whether they have peaked.
Economists polled by Reuters expect the data to show that the headline consumer price index (CPI) rose to 6.7% in November. This will be a significant increase from the previous 6.2%. The core CPI, which excludes the volatile food and energy prices, is expected to have risen to almost 5%.
Inflation numbers have an impact on the Bitcoin price. Strong inflation means that the Federal Reserve will embrace a more aggressive policy when it meets next week. Jerome Powell has already hinted that the bank will accelerate the pace of winding down quantitative easing.
Bitcoin price prediction
The four-hour chart shows that the BTC price has been in a spectacular recovery in the past few days. It rose from a low of about $42,000 to about $52,000. This price was along the 38.2% Fibonacci retracement level.
The spectacular recovery has then lost momentum and is now at around $49,000. It is still below the 25-day and 50-day moving averages, signalling that bears are still in charge.
Therefore, there is a likelihood that the coin will continue falling ahead of the latest US inflation data. This means that it will decline to about $45,000.
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