Key Takeaways:
- Bitcoin opens week in profits alongside US stocks.
- The intraday gains come ahead of the US inflation report on July 12.
- Bitcoin holders’ count is going upward.
WARSAW (CoinChapter.com) — Bitcoin (BTC) kicked off the week cautiously, with investors noting hawkish remarks by several Federal Reserve officials while awaiting inflation data.
Following a modest 1.5% decline last week, the BTC price fluctuated above $30,000, a psychological target among traders, on July 10. Its price action appeared similar to the Wall Street indices, particularly the Nasdaq Composite, responding inversely to the US dollar index (DXY), which fell 0.25%.
All eyes on CPI print
There are no clear catalysts to drive July 10’s price action. However, traders are somewhat cautious about the upcoming US consumer price index (CPI) report on July 12.
July’s headline inflation is estimated to have jumped 0.3% month-over-month (MoM), thus bringing the annual CPI from 4% to 3.1%. Meanwhile, the core gauge is also increasing by 0.3% MoM. However, the market forecasts the 12-month reading to stick around 5% compared to 5.3%, meaning inflation is persistent.
Sticky inflation could increase the Fed’s potential to increase rates further in 2023. Last week, three central bank officials — Michael Barr, Mary Daly, and Loretta Mester — admitted they would need to raise rates to bring the CPI back to their 2% target.
In other words, a 25 basis points (bps) rate hike is possible in the next Fed meeting on July 25-26, which may curb investors’ appetite for riskier assets like Bitcoin.
But are Bitcoin traders worried?
Most Bitcoin traders have hit the snooze button on the Fed updates if one watches the coin’s performance this year (up 82% YTD) despite the rate hike scare.
For instance, since May 2023, the number of unspent transaction outputs (UTXO) has increased from 1 million to 3 million. In addition, the 3 million-6 million UTXO cohort has increased modestly in the same period.
An increase in the UTXO age band in the long term suggests that investors want to hold Bitcoin with conviction. On the other hand, if the age band of the short-term period increases, it means old holders are selling to the young ones.
“It can be seen that the transition from Young → Old coin occurred during the period when the market showed a sideways movement,” noted a CryptoQuant analyst, adding:
“It seems that the base of investors who will support the market is strengthening.”
Traders have been particularly bullish about BlackRock’s Bitcoin ETF application with the US Securities and Exchange Commission in June. They think the company’s 99.99% success in getting its filings approved may result in the country’s first Spot Bitcoin ETF.
Bitcoin has also benefited from being among the few cryptocurrencies the SEC does not treat as security.
Bitcoin price analysis for the week
A CPI increase may weaken Bitcoin’s short-term upside prospects, meaning its price may fall below its prevailing $30,000-$31,500 trading range. Suppose it happens. Then, the BTC price’s weekly target will shift toward $28,500.
Conversely, a bounce from $30,000 will likely push the BTC price toward $31,500. Meanwhile, a further close above the 31,500 level could trigger a bull flag scenario with the price target toward $34,500, up 13.5% from the current level.
