Bitcoin Price Drops Below $23,200 Support Level as Inflation Hits 6.4%
Bitcoin was trading around the $22,800 mark, consolidating between the $22,500 and $24,000 mark, when it suddenly dropped below the support level at the $23,200 mark. This could signal a short-term corrective move, taking the price to the $21,400 mark. Currently, the price of Bitcoin is down 1.5% to $21,550. The overall cryptocurrency market cap stands at $1.03 trillion, and Bitcoin’s dominance rate is 41.6%.
The largest digital asset has been under pressure from U.S. regulatory developments, with the New York Department of Financial Services ordering Paxos Trust Company to stop issuing BUSD, a Binance-branded, third-largest stablecoin that boasts a market capitalization of around $15 billion. The U.S. Securities and Exchange Commission (SEC) issued a Wells Notice to Paxos earlier this month, alleging that BUSD is an unregistered security.
Inflation data from the U.S. showed that the Consumer Price Index rose 0.5% in January, compared to 0.1% in the previous month. Inflation on an annual basis was higher than expected, with a rate of 6.4%, compared to 6.5% in December and an anticipated 6.2%.
On Tuesday, Kitco senior technical analyst Jim Wyckoff noticed that Bitcoin futures prices had increased, which was an encouraging sign for BTC. He further commented that “A fledgling price downtrend is now in place on the daily bar chart.” After a volatile Tuesday trading session, Bitcoin (BTC) appears to be taking a slight step back. Toward the end of the US trading session, it was the bulls who asserted their control and drove the price of Bitcoin higher.
Edward Moya, senior market analyst at OANDA said, “Just when most of the traditional macro crypto drivers turn bearish, Bitcoin tries to show some resilience. Bitcoin is posting a modest rise as the January inflation report suggests the Fed could keep rates higher for longer. The market might be pricing in a little more Fed tightening but that isn’t weighing that much on cryptos today. Regulation and contagion risks have pressured Bitcoin this month, so the downward move was potentially exhausted.
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2. “War ‘Just getting Started’—$1 Trillion Crypto Crash Sparks Serious Bitcoin And Ethereum Price Warning” Forbes, 14 Feb. 2023, https://www.forbes.com/sites/billybambrough/2023/02/14/war-is-just-getting-started-1-trillion-crypto-crash-sparks-serious-bitcoin-and-ethereum-price-warning/
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