Home blogAnalysis CPI Data Delivers a Bitcoin Bounce, but Is It Enough to Break Out?

CPI Data Delivers a Bitcoin Bounce, but Is It Enough to Break Out?

BitBreak Bitcoin Analysis

by Keith Alan
BitBreak, is Keith Alan's daily BTC analysis Live Streamed on YouTube 6-12-2024

New economic data delivers a Bitcoin bounce just hours ahead of FED Chair Powell’s press conference. Now, the market is eager to see if this move is sustainable or if BTC will remain range-bound. I’m no economist, but the talking heads on CNBC suggest the price action aligns with the data, indicating that FED policy is taking effect. This counters last week’s jobs data that raised concerns about a potential rate cut this year. For now, the data breathes renewed hope that one or more cuts are still on the table. Tomorrow’s jobs data could either support or challenge today’s assumptions. While today’s move seems logical, it aligns perfectly with the Killer Whale Games I outlined in my analysis on Friday and Monday. With Powell scheduled to speak in a few hours and more jobs data coming tomorrow, these whale games are likely not over.

Opinions only. No financial advice.

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For those new to my analysis, here’s a brief on the Killer Whale Games:
Historically, volatility like we see now is common around FOMC rate hike decisions, FED Chair Powell speeches, and economic data. This week, we have all three. Predatory killer whales exploit FUD, FOMO, and thin liquidity to push prices in both directions within the trading range. They punish late longs and shake out weak hands before reversing to squeeze shorts that were too greedy to close. This is the second time in the last 10 days we’ve seen this game.

Yesterday, I stated: “Powell speaks Wednesday: A dovish tone could send BTC price upward.” Killer Whales love to exploit thin liquidity around FED days. After hunting late longs, they might push the price back up to liquidate shorts. It’s playing out exactly as predicted!

I’m not gloating. This is a reminder that things aren’t always as they seem. Reacting too quickly to daily news can be risky. However, taking profits is never a bad idea, so if you’re scalping and seeing green, congrats!

How to Trade This Bitcoin Price Action
Filtering out the noise and focusing on the charts can bring clarity. Macro fundamentals are crucial, but their impact differs when scalping versus long-term investing. Resistance above $70k remains much stronger than support down to $65k. Liquidity above $66k up to $70k has been cleared, allowing for an easy round trip unless new bid liquidity appears to support the price.

Unfortunately, a large portion of the bid ladder that appeared overnight has been pulled, and ask liquidity around $72k has stacked heavier. We still need to validate an R/S flip at $69k. Despite multiple failed attempts to hold above the 2021 top, I remain bullish on Bitcoin. The macro outlook is positive, but there are no straight lines in this market, and I haven’t seen enough bid liquidity in the range to convince me a breakout is imminent.

The Bullish Case
In addition to the post halving, BTC ETF era macro outlook for Bitcoin, we are coming off a solid retest of support at the 50-day moving average, and indicators like Trend Precognition and MACD are suggesting an upward shift in momentum on the daily timeframe. Whether this develops into a move to revisit all-time high territory above $73k remains to be seen, but ask liquidity is very heavy above $72k. It will either take a roof pull or a large block of bids to push through this resistance and we could see that when the dust settles after tomorrow’s economic data. These scenarios could develop without notice, and when they do, I’ll see it in the order book on FireCharts and trade accordingly.

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