As the Bitcoin price approaches the $42,000 limit again, the cryptocurrency markets are constantly on the move. The US inflation data, which will be announced in a few hours, could increase market volatility. These critical data have the power to determine the direction of the market.
Bitcoin is currently finding buyers at $41,792 and its losses in the last 24 hours have dropped to 1.4%. The US inflation data will be published in the coming hours. These data will reveal the Federal Reserve’s (Fed) combat stance. The quite positive data from last month had supported a significant rally. Now, for the current optimism not to reverse, it is important for inflation to come out low again.
While oil prices were hovering around $80 in November, they have fallen this month, and even though inflation may come out a bit high due to energy prices, optimism for December’s data could balance the fear. On the other hand, since employment data came out exceptionally strong, lower inflation compared to last month could lift the Bitcoin price back above $44,000.
Annual inflation, which was at 3.2% last month, is expected to be announced at 3.1% this month. A figure at this level or lower could increase optimism. While monthly core inflation is expected to rise from the previous 0.2% to 0.3%, a lower figure is sought here as well.
Bitcoin price is retaining 11% of its gains from December. Analysts pointed out yesterday the $42,000 region as a different critical level. If the price can maintain this threshold, it could reach new highs above $44,000. On the other hand, according to Poppe’s statement, if Bitcoin closes above $39,000 this month, it could embark on a journey towards $50,000.