{"id":19826,"date":"2023-02-08T01:58:58","date_gmt":"2023-02-08T09:58:58","guid":{"rendered":"https:\/\/coinnetworknews.com\/bitcoin-bulls-stumble-at-23-4k-as-feds-disinflation-sparks-btc-price-rally\/"},"modified":"2023-02-08T01:58:58","modified_gmt":"2023-02-08T09:58:58","slug":"bitcoin-bulls-stumble-at-23-4k-as-feds-disinflation-sparks-btc-price-rally","status":"publish","type":"post","link":"https:\/\/coinnetworknews.com\/bitcoin-bulls-stumble-at-23-4k-as-feds-disinflation-sparks-btc-price-rally\/","title":{"rendered":"Bitcoin bulls stumble at $23.4K as Fed’s ‘disinflation’ sparks BTC price rally"},"content":{"rendered":"
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Bitcoin (BTC<\/a>) rebounded to key resistance into Feb. 8 as crypto markets got a boost from a familiar source.<\/p>\n

BTC\/USD 1-hour candle chart (Bitstamp). Source: TradingView<\/em><\/figcaption><\/figure>\n

Powell: “Disinflationary process” is here<\/h2>\n

Data from Cointelegraph Markets Pro<\/a> and TradingView<\/a> showed BTC\/USD reaching the important $23,400 zone on Bitstamp overnight.<\/p>\n

The pair reacted positively to the latest comments from the United States Federal Reserve, these also serving to send equities higher during the Feb. 7 Wall Street trading session.<\/p>\n

Fed Chair Jerome Powell again mentioned \u201cdisinflation\u201d during his appearance, reinforcing market hopes that interest rate hikes could cool more quickly in line with inflation. These stemmed from the latest meeting of the Federal Open Market Committee (FOMC) on Feb. 1, where the Fed raised rates by 0.25%.<\/p>\n

\u201cThe message that we were sending at the FOMC meeting last Wednesday was really that the disinflationary process \u2014 the process of getting inflation down \u2014 has begun, and it\u2019s begun in the goods sector, which is about a quarter of our economy,\u201d he said<\/a> at The Economic Club of Washington, D.C.<\/p>\n

Powell nonetheless cautioned that there was \u201ca long way to go\u201d and that the U.S. was in \u201cthe very early stages of disinflation.\u201d<\/p>\n

Despite this, risk assets rallied into the Wall Street close, with the S&P 500 and Nasdaq Composite Index finishing up 1.3% and 1.9%, respectively.<\/p>\n

Bitcoin also erased previous weakness, having dropped below $22,700 earlier in the week, but bulls proved unable to tackle ask liquidity at $23,400 and beyond.<\/p>\n

That liquidity remained in place on the day, as visible in data covering the Binance order book supplied<\/a> by on-chain monitoring resource Material Indicators.<\/p>\n

BTC\/USD order book data (Binance). Source: Material Indicators\/ Twitter<\/em><\/figcaption><\/figure>\n

\u201cMarkets rallied into the close yesterday, with Bitcoin’s last H4 candle showing weakness at resistance & printing a shooting star,\u201d popular trader Mark Cullen summarized<\/a> about the latest events. <\/p>\n

\u201cI personally am still waiting for the lows to get swept. BUT if the BTC can close a H$ above 23.4k i will look for a push higher.\u201d<\/p><\/blockquote>\n

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Crucial area held for #Bitcoin<\/a>, so we should be seeking for continuation.<\/p>\n

Gameplan is simple;
– Crack $23.3K and we’ll see new highs, correction is over.<\/p>\n

– Lose $22.6K and I’ll be seeking $21.5-21.7K for longs on #Bitcoin<\/a>. pic.twitter.com\/xJp6iSbeQb<\/a><\/p>\n

\u2014 Micha\u00ebl van de Poppe (@CryptoMichNL) February 8, 2023<\/a><\/p><\/blockquote>\n

Micha\u00ebl van de Poppe, founder and CEO of trading firm Eight, was also encouraged by Bitcoin\u2019s reaction. A flip of $23,300 to more solid support, he told Twitter followers on the day, would mean that the latest BTC price correction “is over.”<\/p>\n

BTC\/USD traded at around $23,200 at the time of writing, with traders still counting down to volatility returning.<\/p>\n

\u00a0Golden cross vs. death cross to resolve in a “few days”<\/h2>\n

Looking ahead, the rest of the week held little by way of important macroeconomic cues for crypto markets.<\/p>\n

Related:\u00a0Bitcoin takes \u2018lion\u2019s share\u2019 as institutional inflows hit 7-month high<\/a><\/em><\/strong><\/p>\n

As Cointelegraph reported<\/a>, eyes were already on next week’s inflation data, this coming in the form of the Consumer Price Index (CPI) print for January.<\/p>\n

At the same time, chart analysts hoped for a positive outcome from Bitcoin’s latest “golden cross” on the daily chart \u2014 its first since September 2021<\/a>. At the same time, however, BTC\/USD weekly timeframes continued to print a “death cross,” a phenomenon which often preceded further downside in the past.<\/p>\n

“Many say Death Cross\/Golden Cross Lagging Indicator. It is Lagging for those who only think Golden Cross means Bullish, and Death Cross means Bearish. I use this indicator to understand Momentum,” fellow trader Jibon wrote in part of a dedicated Twitter thread<\/a> on the topic on Feb. 7.<\/p>\n

Jibon compared the current setup to previous instances in 2015 and 2019, and added that it would take a “few days” for the impact of the crosses to become more obvious.<\/p>\n

BTC\/USD comparative charts. Source: Trader_J\/ Twitter<\/em><\/figcaption><\/figure>\n

The views, thoughts and opinions expressed here are the authors\u2019 alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.\n<\/p>\n