- Bitcoin price has formed an ascending triangle pattern on 4H chart.
- Focus shifts to the upcoming US consumer inflation data.
Bitcoin price pulled back to the lowest level since August 4th as investors waited for the upcoming American consumer inflation data. BTC dropped to a low of $23,000, which was substantially lower than this month’s high of $24,591. The BTC/GBP and BTC/EUR have also dropped to 19,000 and 22,530, respectively.
US inflation data ahead
Bitcoin price dropped sharply on Wednesday ahead of the upcoming American inflation data. Economists expect data by the Bureau of Labor Statistics (BLS) to show that the country’s inflation dropped from 9.1% in June to 8.7% in July. This happened as the price of gasoline pulled back in July to about $4 per gallon.
Inflation is an important economic number because it forms part of the Federal Reserve’s dual mandate. The bank is tasked to ensure that inflation and the unemployment rate remains stable. Last week, data published by the American government showed that the country’s unemployment rate dropped to 3.5% in July. The economy added over 528k jobs.
Therefore, strong US inflation data will signal that the Fed will continue hiking interest rates n the coming months. It has already hiked rates by 225 basis points this year, and there are signs that the bank will continue hiking in the coming months.
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Still, analysts and the market believe that the Fed will slow or even lower rates in 2023. For example, bond yields have declined modestly in the past few days. The 10-year bond yield has dropped to 2.7% while the 30-year has moved to 3%.
Bitcoin price has also pulled back following the disappointing earnings by Coinbase. The company lost $1.1 billion or $4.98 per share in the second quarter. That compared with the profit of $1.6 billion it made in the same quarter in 2021.
Bitcoin price prediction
The four-hour chart shows that the BTC/USD pair has retreated sharply in the past few days. It has moved from last month’s high of 24,600 to about 23,000. A closer look shows that it has formed an ascending triangle pattern that is shown in green. At the same time, the MACD has moved slightly below the neutral point.
Therefore, bitcoin price will likely remain in this range and then have a bullish comeback in the coming days. If this happens, the next key level to watch will be at 25,000.
