By
Mayowa Adebajo
April 24th, 2024
Despite the inflation coming at a four-decade high, Bitcoin shows strength above $44,000. Read more to know how the bulls and the bears are taking up the fight.
On Wednesday, January 12, the United States announced its inflation data standing at a staggering 7% for the year 2021. These have also been the highest inflation numbers in over four decades since 1982. There was no negative effect of this inflation news on Bitcoin or the overall crypto market. Rather the Bitcoin (BTC) price surged past $44,000 levels. As of press time, Bitcoin is trading 2.85% up at a price of 443,848 with a market cap of $828 billion.
Bitcoin has been on a trend reversal this week after bouncing back from $40,000 support. However, the market is having some mixed opinions regarding whether this is a sustained move or a dead cat bounce.
A Twitter trader that goes by the name Material Scientist writes that one still cannot rule out a significant downside in the Bitcoin price. The analyst points out that the problem lies in the order book as bids have disappeared below spot. So if the resistance strengthens immediately, the outlook doesn’t bode well for the bulls. He writes:
“Remainder of bids was just pulled. Either they’re done accumulating and use liquidity to chase now, or we see the same thing as in late November (pulled bids + stacked asks a few days later). Now we wait.”
Another popular market analyst Will Clemente points out the rising open interest (OI) and the lack of liquidation cascade.
Some Bullish Signals for Bitcoin Investors amid Inflation News
For Bitcoin, the outlook doesn’t look bleak entirely as some on-chain metrics point out at bullishness. The one-day outflows on major Bitcoin exchanges have crossed 30,000 BTC as per data from CryptoQuant.
On-chain data CryptoQuant also tracks 21 exchanges for its order book data. Last week, one analyst pointed out that there was a crazy imbalance between the bulls and the bears. He further noted that bears were getting tired of selling.
Commenting on the Bitcoin trading volumes, Samson Mow, the CSO of Blockstream said: “Volumes are thin. That means the market can have huge moves up or down easily. Given that we had a big move down already, and everyone is buying like no tomorrow, I’d say the next move is up”.
On the other hand, reports are that miners have started accumulating Bitcoin heavily. In fact, miners are reportedly accumulating Bitcoin faster than in May 2021.
Miners are accumulating #Bitcoin at the fastest rate since May 2021!💥🚀 pic.twitter.com/5n9RRty0Qi
— Bitcoin Archive (@BTC_Archive) January 11, 2022
On the other hand, Swiss Bank SEBA expects more institutional money to flow into Bitcoin this year. In a recent interview, Seba Bank CEO Guido Buehler said:
“We believe the price is going up. Our internal valuation model indicates a price right now between $50,000 and $75,000. I’m quite confident we are going to see that level. The question is always timing/”
It will be interesting to see as to who wins the fight between the bulls and the bears.