- The possible increase in US CPI and bank withdrawals could cause the price of Bitcoin to rise.
- BTC’s short-term outlook remained bearish at press time.
BitMEX co-founder Arthur Hayes published a Substack newsletter explaining why Bitcoin [BTC] will not tilt towards $20,000 before the next bull run. in a (n Article Titled “Patience is Beautiful,” Hayes cited several factors as reasons for his projection.
Among the issues he raised were the consumer price index (CPI) and the crises in the US banking sector. For context: The Consumer Price Index is an important economic metric that measures the overall change in consumer prices based on the cost of goods and services.
A high CPI is Bitcoin’s profit
Referring to the CPI, the exchange’s current chief information officer (CIO) noted that inflation in the country would hit a local bottom before accelerating again later in the year. He wrote,
“Due to the statistical phenomenon known as the base effect, the high monthly (MoM) inflation readings of 2022 will disappear and be replaced by lower MoM inflation readings of summer 2023.”
Hayes also agreed with Bianco Research’s CPI forecast, which calls for the consumer price index to rise above 5% by December 2023. In particular, a higher consumer price index indicates higher inflation.
Source: Bianco Research
Ahead of his last release, the former CEO of the exchange had said that was the case debt profile by the US Treasury would increase demand for Bitcoin.
outflow from the banks
Regarding the crisis in the banking system, Hayes said most investors would return to the events of 2020 and 2021.
During this period, a large percentage of investors shifted their funds from the traditional sector to the money market and other markets that offered it better yields.
Interestingly, it appeared as if investors had already taken action, according to the Federal Deposit Insurance Corporation (FDIC). Q1 report.
The agency noted that total deposits declined for the fourth consecutive quarter, it noted.
“Total deposits decreased by $472.1 billion (2.5 percent) between Q4 2022 and Q1 2023. The quarterly decline is the largest decline reported in the QBP since data collection began in 1984. This was the fourth consecutive quarter that the industry reported lower total deposits.”
bears in price action
Meanwhile, BTC has seen a slight decline reprieve, as the price is up 1.84% over the past seven days. But in terms of volatility, Bollinger Bands (BB) showed that the king coin has shrunk.
To read Bitcoins [BTC] price prediction 2023-2024
Furthermore, the technical outlook showed that BTC had exited the overbought territory as the price stopped touching the ceiling.
However, due to the state of the Exponential Moving Average (EMA), the rise may not last. At the time of writing, the 20 EMA (Cyan) had crossed the 50 (EMA) Yellow. Therefore, the trend may have turned bearish at the time of writing.
Source: TradingView
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