Bitcoin price threatens lowest weekly close since 2020 as inflation spooks markets
BTC price action needs to reclaim the $29,500 mark to avoid resuming its pattern of lower lows on the weekly chart.
Bitcoin (BTC) dropped to two-week lows on June 11 as the week’s Wall Street trading ended with bears in control.
U.S. inflation print proves setback
The pair had fallen in step with stock markets on June 10, these finishing the week noticeably down — the S&P 500 and Nasdaq Composite lost 2.9% and 3.5% respectively.
This was on the back of surprisingly high inflation data from the United States, which took a turn for the worst in stark contrast to expectations. As Cointelegraph reported, at 8.6%, annual inflation came in at the highest since December 1981.
Reacting, market commentators were thus firmly on the bearish side when it came to future BTC price action.
“When we drop to $22,000 – $24,000 on Bitcoin they will call for lower Don’t be too greedy when the time comes,” popular Twitter account Crypto Tony told followers.
Filbfilb, co-founder of trading suite Decentrader, meanwhile contrasted the current environment with the March 2020 COVID-19 crash. This year’s slow bleed, he argued, was if anything more painful than the “car crash” price declines of the time that briefly took Bitcoin to $3,600.
“Inflation hasn’t peaked, and neither has Bitcoin,” MicroStrategy CEO Michael Saylor offered in a more hopeful angle after the data print.
“In the current macro backdrop it doesn’t matter how many charts are showing confluence that we are reaching historically oversold levels,” popular Twitter account PlanC countered.
“As long as Bitcoin remains correlated to risk on assets I don’t see a significant trend reversal anytime soon.”
If it were to end the week at current levels or any below $29,450, meanwhile, BTC/USD would be threatening its lowest weekly close since December 2020.
Doubts over rate hikes emerge
Looking ahead, forthcoming decisions on rate hikes in response to inflation were primed to be the major focus of the coming week.
The Federal Reserve’s Federal Open Markets Committee (FOMC) minutes, due for the meeting on June 14-15, will provide clues on how aggressive policymakers plan to be when it comes to stemming price rises.
“I think that at some point, the market will realize that inflation is not going away soon and that rates will still be relatively low,” Twitter account Daan Crypto Trades argued.
It added that gold could provide an early indication of that “new old” trend by rising from its current trading channel.
“$GOLD could be the leading factor in such a shift. Closely watching that. Right now, we’re still in the process of baking in the bad factors,” a post on the day read.
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