Bitcoin price appears to be entering into consolidation mode as the market sentiment moves into neutral. While optimism over disinflation is boosting the asset, recession woes remain a concern. As at the time of writing, it was down by 0.45% at $27,487.04.
What’s driving the market
On Thursday, bitcoin price found support in the US stock market’s gains as financial markets digested the inflation data released in the previous session. As has been the case in past months, cryptocurrencies tend to have a close correlation with the US stock market.
In particular, the tech-heavy NASDAQ Composite index was up by 1.04% as at the time of writing. Optimism over disinflation and the subsequent decline in Treasury yields has further supported the equities and cryptocurrencies by extension.
Even so, the market sentiment is rather neutral; an aspect that explains why bitcoin price appears to be headed into consolidation mode. The crypto fear & greed index, which is a major measure of the investors’ mood in the industry was at a neutral level of 52 on Thursday. This is a significant decline from last week’s greed level of 64.
The mixed feelings are largely based on the health of the US economy. On the one hand, concerns over the country’s debt ceiling have added to the persistent recession woes. However, hopes over disinflation, coupled with bitcoin’s status as a contemporary safe haven will likely continue to support the asset.
Bitcoin price prediction
BTC/USD rebounded above the support zone of 27,250 after momentarily dropping below this level on Wednesday. As the financial markets digested the US CPI numbers, the cryptocurrency dropped to a six-week low at 26,795.50 before bouncing back.
A look at its daily chart shows bitcoin price trading below the 25 and 50-day EMAs. While this is a bearish signal, the bulls still have an opportunity to yield a rebound. Granted, I do not expect the crypto to hit the psychologically crucial level of 30,000 in the short term.
More specifically, the formation of a symmetrical triangle hints a probable consolidation in the ensuing sessions. The range between the 25-day EMA at 28,508.37 and the support level at 27,256.66 will be worth watching.
Even with further rebounding past the range’s upper border, the asset will likely remain below the resistance level of 29,298.92. On the lower side, 26,795.50 may offer steady support to bitcoin price for a while longer.