Bitcoin double top ‘invalidated’ amid fear CPI may fuel macro comedown

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Bitcoin (BTC) has been swamped with a test of $30,000 as new support on Wall Street on April 11 after hitting a 10-month high.

$30,000 surge hurts liquidity

Cointelegraph Markets Pro and TradingView BTC/USD showed a drop from its overnight peak near $30,500.

The pair spent most of the day bouncing off the $30,000 mark after finally crossing $30,000 after a short squeeze of several weeks.

A major concern from some market participants came around a possible correction to $25,000 or below.

“Signs of BTC double top distortion were there,” he said I have written In an update on the Twitter thread.

“$BTC voids double top and confirms breakout to new annual high.”

Rekt Capital then detailed the conditions that need to be met on the daily timeframe to sustain the bullish momentum.

for #bitcoin To remain bullish beyond this point, the price must:

• Daily candle closes above the high (black)

Dip and turn into a new support$BTC Right now, we are well positioned for a daily close above the high#Crypt #bitcoin pic.twitter.com/gm9g9EQyP2

— Rekto Capital (@rektcapital) April 11, 2023

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Meanwhile, analyzing the composition of Binance’s order book for the day, the monitoring resource’s material indicators suggested that the uptrend was still likely to continue.

“After $30,000, BTC liquidity spreads in both directions” explained part of the explanation.

“There are no large buy-sell walls. In fact, the so-called walls we see on FireChart are rather thin. With bullish momentum building, there is potential for further upside.”

CPI Lurks as Volatility Catalyst

The overall mood is mixed with anxiety, thanks to the macrocatalyst waiting in the wings for the rest of the week.

RELATED: Bitcoin ‘Facing Headwinds’ As U.S. Money Supply Sinks to the Lowest Since 1950s

The US Consumer Price Index (CPI) for March will be released on April 12th, followed by the Producer Price Index (PPI) on April 13th.

Both events are known to induce volatility in risky assets, so Material Indicators has acknowledged that there could be an “explosive move” in Bitcoin this time around.

“Wednesday’s CPI and Thursday’s PPI reports could trigger more explosive moves. If the numbers are hot, expect a correction,” he added.

Market commentator Holger Zschaepitz nevertheless flagged the highest level of shorting in the S&P 500 since 2011 ahead of the CPI announcement.

Hedge Funds Push S&P Short 10x High, Ahead of CPI, Earnings. Net short positions not seen since 2011. A Goldman client cut his long tech at the fastest pace in 15 months. https://t.co/K9CfM04siA pic.twitter.com/PD9NUOEqV6

— Holger Zschaepitz (@Schuldensuehner) April 10, 2023

As reported by Cointelegraph, the volatility correlation between Bitcoin and equities has dropped significantly.

Analytical account Tedtalksmacro added that “traders are more likely to take risks and enter the event” when it comes to CPI.

Some of the posts read when bitcoin crossed $30,000 were “risks of hot printing forcing re-pricing of the entire market” and on BTC/USD “there are signs of bubbling here, Prices are going up and there are a lot of big spot offers going on… lifted.”

Bitcoin is currently trading above $30,000.

If you’ve ridden the wave so far, it might be a good time to think about risk aversion, but I think the real resistance is around $34,000…

head wind:
– US CPI (tomorrow); traders may take risks to enter the event. The risk… https://t.co/T6FYz9c2Rs

— tedtalksmacro (@tedtalksmacro) April 11, 2023

The views, thoughts and opinions expressed herein are those of the author only and do not necessarily reflect or represent the views or opinions of Cointelegraph.