Bitcoin whales have become bystanders in the current bearish market, possibly due to the ongoing war in the Middle East. The largest crypto lost its support at $27,000 this week, sending fear across the market as negative sentiments grew concerning a possible drop to $20,000.
Bitcoin Price Slides On CPI Data Release
The US Consumer Index (CPI) data showed that inflation remained unchanged at 3.7% but slightly higher than the expected 3.6%. However, the price of goods and services increased at a higher rate than expected for September.
Meanwhile, the core CPI, excluding the prices of food and energy increased 0.3% on a monthly basis and 4.1% on a yearly basis, both matching expectations.
Bitcoin and the crypto market dipped on the backdrop of the CPI data release but the largest cryptocurrency appears to have sustained above support at $26,500.
Bitcoin price is up 0.5% on Friday to $26,859 while Ethereum is up 0.2 % to $1,549. The total market value has increased by 0.1% to $1.08 trillion. Bitcoin is still the biggest cap at 50% amid reports of Ethereum receding ground to the largest digital asset amid geopolitical tensions.
The drop implies that Bitcoin’s network activity has decreased and this can be attributed to a slump in new investments entering the crypto market, leading to dwindling liquidity and ultimately reduced price volatility.
Whales and institutional investors could also be the cause of this shift as they are interacting less. Without a meaningful transfer of Bitcoin between these two cohorts “the chances of a rally in the near future are low.”
Nevertheless, CryptoQuant assures investors that the situation is not as dire as it may seem, considering both the hash rate and mining difficulty are moving up suggesting that the network fundamentals are healthy.
Bitcoin Bulls Push For A Rebound
Bitcoin price has started forming a green daily candle, indicating that buyers are gaining strength. The immediate support at $26,500 is holding in place but again, BTC is relatively in a good position to rebound to $30,000 as long as support at $25,500 remains intact.
The Relative Strength Index (RSI) although below the midline in the neutral area, shows signs of bouncing back toward the overbought region. Trending upwards would call more buyers to seek exposure to BTC and eventually help reclaim the ground above $27,000 and $28,000.
Resistance is anticipated at the 200-day Exponential Moving Average (EMA) at $27,015. Bitcoin bulls must push above all three moving averages, including the 21-day EMA and the 100-day EMA to fully affirm the bullish grip for a breakout targeting $30,000.
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