Cryptocurrency prices have attempted to bounce back this week but found substantial resistance as the crypto fear and greed index remained in the fear zone.
Bitcoin is still loitering at the $96,000 level, while Stellar (XLM) is trading at $0.3200. IOTA was at $0.2350, down by 63% from its highest level in 2024.
So, how will these coins react after the US inflation data?
US CPI Data Ahead
The main catalyst for Bitcoin and other altcoins is the upcoming US Consumer Price Index (CPI) data on Wednesday. Economists polled by Reuters anticipate that the headline CPI remained at 2.9% in January, while the core CPI rose to 3.2%.
A higher-than-expected inflation report will probably put pressure on cryptocurrencies, while a lower figure may lead to a rebound.
That’s because the Fed has shifted its focus from the labor market to inflation. In a statement on Tuesday, Powell said that the bank will maintain higher rates this year because of inflation.
He said, “With our policy stance now significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust it.”
Therefore, Wednesday’s inflation report will not significantly impact Bitcoin, Stellar, IOTA, and other altcoins. The market has resigned itself to the fact that the Fed will not soon cut rates.
Bitcoin Price Double-Top is a Red Flag
Technicals suggest the Bitcoin price is at risk of a big meltdown in the coming weeks. BTC has formed a double-top pattern at $108,200. A DT is a highly bearish pattern in the crypto market.
Bitcoin has also dropped below the lower side of Andrew’s pitchfork tool, a sign that bears have prevailed.
It has also crashed below the 50-day moving average, while the Relative Strength Index (RSI) and the Percentage Price Oscillator (PPO) have formed a bearish divergence pattern.
Therefore, Bitcoin will probably crash to the key support at $89,200, the neckline of the double-top pattern.
IOTA Price is at Risk Despite Rebased Progress
The IOTA token is at risk of further downward momentum even after the developers announced an incentive program to encourage developers in its Rebased program. A select number of developers will receive $100,000 to build apps in its network.
Technicals suggest that the IOTA price has fallen below the 200-day moving average, a highly risky situation. The spread between the 50-day and 200-day averages has narrowed, risking a death cross pattern.
IOTA has also formed a bearish flag chart pattern. Therefore, the coin may crash to the next key point at $0.1500, the highest swing in September and 37% below the current level.
Stellar Price Could Crash if it Loses Key Support
The daily chart reveals that the Stellar price has plunged in the last two months. There are signs it is moving from the distribution to the markup phase of the Wyckoff Theory.
Stellar is sitting at key support, the lowest swing in December last year, and the 200-day Weighted Moving Average. This support is also notable because it is the neckline of the double-top pattern.
Therefore, the path of the least resistance for the XLM price is bearish. The next level to watch is last week’s low at $0.2635. A break below that support level will point to more downside, with the key level being at $0.200.
Most altcoins may crash after the US inflation data because of Bitcoin’s double-top chart pattern.
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