The rally has seen Bitcoin hit a new four-week high, with investors monitoring the asset’s price movement for a bottom that would likely usher in a new price breakout. Based on the flagship cryptocurrency’s latest price movement, Kitco News analyst Jim Wycoff on December 13 pointed out that Bitcoin has potentially begun a ‘bullish upside breakout.’
According to Wycoff, Bitcoin bulls have built a near-term technical advantage after a tussle of almost equal strengths.
“Today’s price action has produced what looks to be the beginning of a bullish upside “breakout” from the choppy and sideways trading range on the daily bar chart to suggest a price uptrend will develop. Bulls have gained the near-term technical advantage,” Wycoff said.
Bitcoin positive reaction to CPI data
Indeed, Bitcoin rallied after the latest Consumer Price Index (CPI) indicated that the Federal Reserve was making significant steps in winning the war to bring down inflation. The latest data showed that November inflation came in at 7.1% on a year-on-year basis compared to the 7.3% forecast, while monthly CPI was 0.1% less versus the 0.3% expected.
In this line, the crypto market has been monitoring the inflation data since it will determine the Fed’s next policy on interest rates. Overall, Bitcoin has been weighed by the high inflation with the tighter monetary policy putting pressure on risky assets.
Bitcoin price analysis
By press time, Bitcoin was trading at $17,791, recording daily gains of almost 5% while weekly gains stand at 4.5%.
Bitcoin is looking forward to reclaiming the $18,000 zone that acted as a critical support level for the asset in recent weeks. However, with inflation cooling down, the ability of Bitcoin to sustain the gains will mostly depend on the bull’s potential to overpower bears.
In recent weeks, Bitcoin has consolidated around the $17,000 level. Notably, if Bitcoin fails to hold the $17,000 position, the asset will be in line for a possible further correction.
Bitcoin technical analysis
Elsewhere, Bitcoin’s latest gains have been reflected in the asset’s technical analysis. A summary of the daily gauges on TradingView aligns with ‘buy’ sentiment at 13 while moving averages are also for buying at 9. Oscillators are for the ‘buy’ sentiment at 4.
The reaction to the CPI data shows that Bitcoin has temporarily put aside effects from any possible criminal charges and reserve concerns regarding the Binance crypto exchange. At the same time, Bitcoin is building momentum following the arrest of FTX founder Sam Bankman-Fried.
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