US CPI data for March came in at a hotter than expected 3.5%. This rise is not good for markets generally, and most indices were down. However, after an initial fall, bitcoin has held support and is currently at $70,000. The accumulation period for $BTC continues.
Inflation hedge?
Bitcoin has often been talked about as an inflation hedge, but thus far this has generally not held true. However, things have changed in this bitcoin bull market. Traditional markets are now in bitcoin, and if institutions perceive that bitcoin is indeed that hedge, the self-fulfilling prophecy can come to pass.
Inflation is stealing wealth
With all this said, a higher Consumer Price Index does not give the environment for most assets to thrive, and does not bode well for future interest rate cuts. The Fed’s mantra of 2% inflation becomes further off, and perhaps interest rates need to stay higher for longer.
The Fed’s balancing act has also become a whole lot more difficult. On the one side they have inflation rearing its ugly head once more, and on the other side they have an economy that is sorely in need of rate cuts in order to avoid a headlong plunge into recession.
This is the reality of the fiat-based monetary system that we live in. Few people question why everyone should be expected to live with 2% inflation, when this is stealing generational wealth. Higher than 2% and the system is on the way to implosion. Bitcoin is the life raft that can save you.
Positive $BTC short term price action
Source: Coingecko/Trading View
As can be seen in the short term price action for $BTC, the price is once more above the triangle and the trend line, and the more important base of $69,000 is being held.
Most scenarios look pretty good for bitcoin. The halving is now only 8 days away, and the fact that the mining supply will drop from 900 BTC per day, to only 450 BTC per day, is bound to have an effect on price, even if this isn’t immediately.
Bullish scenarios
If $BTC goes up in this incredibly bullish environment a new all-time high and then further inroads into price discovery are likely to follow. The sideways for longer scenario is also very bullish. This will build price structure and provide an even stronger platform when bitcoin decides to go higher.
A fall down to around $60,000 is also still on the cards, and given that bigger corrections lead to healthier bull markets, this is also a bullish scenario. If the price falls below $59,000 and takes hold below, then, and only then would there be a need for reevaluation of this bull run.
At time of going to press, $BTC is knocking at the door of the $71,300 resistance. A break here could lead to the next resistance at $72,800 and a chance at the all-time high of $73,800. That said, failure to surpass the $72,800 level prints a lower high, and then more sideways price action could ensue.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
