Bitcoin Nears 3-week High As Trader Claims CPI Data Below 7% Could Drive Price To $19,000

Bitcoin (BTC) traded near $17,000 on Jan. 7 after the end of the first trading week of the year saw a rally.

BTC/USD 1-hour candlestick chart (Bitstamp). Source: TradingView

Everyone waiting for the CPI data

Data from Cointelegraph Markets Pro and TradingView followed the BTC/USD pair as it briefly broke above the $17,000 mark in the previous trading session.

The pair had experienced sudden volatility following the new US economic data, but nonetheless faded to leave the key level unable to turn into resistance.

Nonetheless, this brief rally has allowed Bitcoin to reach its highest price since December 20, 2022.

In reaction, market participants continued to look to next week’s Consumer Price Index (CPI) release as a key potential catalyst for risk assets.

“Unemployment will pick up in the coming months. Yields will fall sharply if CPI data is low,” said in tweet Michaël van de Poppe, founder and CEO of the trading firm Eight.

“Relief rally is near.”

“It finally looks like BTC is ready to break out of the $16,000 – $17,000 base range that it has been stuck in for the past few weeks. Start the squeeze,” continuous the hopeful trader Kaleo.

Should CPI data show inflation declining faster than expected, it could fuel a trip to multi-month highs near $19,000, added the futures trader; Satoshi Flipper.

Bitcoin nears 3-week high as trader claims CPI data below 7% could drive price to $19,000
Explanatory chart of the BTC/USD pair. Source: Satoshi Flipper on Twitter

Data Reveals Extent of On-Chain Losses

Looking at the bigger picture, fellow trader and analyst Rekt Capital joined the growing consensus on the current narrow trading range in BTC/USD forming the next lower macro zone.

“Current BTC price action will likely figure as a major cluster in the formation of the lower accumulation range of the bear market,” determined.

In yet another demonstration of the pain hodlers are already in, on-chain analytics firm Glassnode showed that Bitcoin has suffered its second-biggest realized capitalization drop.

Realized capitalization describes the aggregate price at which the BTC supply last moved, with its decrease reflecting realized losses from sales.

“Bitcoin’s 2022-23 bear market has seen the realized top shrink by -18.8%, the second-highest ever, and dwarfed only by the 2011 bear market peak-bottom,” commented next to a graph “Checkmate”, Glassnode’s main on-chain analyst.

“Investors have borne a total of $88 billion in net realized losses.”

Bitcoin nears 3-week high as trader claims CPI data below 7% could drive price to $19,000
Explanatory graph of the losses of the realized capitalization of Bitcoin. Source: Checkmate on Twitter

The views, thoughts and opinions expressed herein are solely those of the authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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