Bitcoin jumps toward $49K amid fears 5%-plus inflation is here to stay

Bitcoin (BTC) inched higher on Sept. 18 as the focus shifted to the Federal Open Market Committee’s (FOMC) policy meeting in the wake of lower inflation numbers last Tuesday.The BTC/USD exchange rate approached $49,000 on the Coinbase exchange, hitting $48,825 before turning lower on interim profit-taking sentiment. Nonetheless, the move uphill raised expectations that the pair would hit $50,000, a psychological resistance target, in the coming sessions.#bitcoin needs to get over $50,000 and just hold it.— David Gokhshtein (@davidgokhshtein) September 18, 2021Inflation fears boost Bitcoin demandThe Bitcoin markets received a boost from fears of persistently higher inflation, despite a softer consumer price index (CPI) report released on Sept. 13. Data showed that the U.S. CPI rose 5.3% year-over-year in August, compared to 5.4% in the previous month. The market received mixed reactions to these numbers, with some cheering that core inflation came out lower than expectations while others pointing that inflation was still at ridiculously high levels —with 5.3% being one of the highest numbers in more than a decade for CPI.”I like to look at inflation data in a median sense (so rather than having one crazy category drive it all, we look at the center of the distribution, across 82 categories, equally weighted),” said Jens Nordvig, the founder of data analytics firm Exante Data. He added:”On [median] metric, [inflation] number was not low.”JUST IN – NY Federal Reserve now sees inflation at 5.2% in one year, 4% in three years; a series high with “large expected price rises” in food, rent, and medical costs.— Disclose.tv (@disclosetv) September 13, 2021

More bullish cues for Bitcoin appeared as TD Securities analysts noted the Federal Reserve might delay the planned tapering of its $120 billion monthly asset purchase policy after the softer-than-expected inflation report. Additionally, Anthony “Pomp” Pompliano, Partner at Pomp Investments, warned that a sustained 5% inflation would have Americans watch their savings evaporate.”The only way to protect yourself in this environment is to make sure you are invested,” Pomp said in a note to clients. “The more invested in markets, regardless of whether it is equities, real estate, crypto, etc., the better off you will be.”Dollar goes up in tandemAs it happened, the BTC/USD exchange rate jumped 4.85% on the day of the inflation data release. The pair moved up another 2.17% on Wednesday, with its prices closing above $48,000. Its prices started consolidating sideways in the next two sessions, only to move further towards $49,000 on Saturday.Surprisingly, the US dollar index (DXY) also moved higher like Bitcoin, iterating that macro investors shifted the capital to assets they deemed as their safe-haven following the inflation report. The index, which measures the dollar against a basket of top foreign currencies, surged 0.41% on Friday to 93.246, its highest level in September.Bitcoin and the US dollar index rise following mixed inflation outlook. Source: TradingView.comMore cues for Bitcoin and the dollar markets should be expected from next week’s FOMC meeting. Related: Bitcoin struggles at $40K after ‘most confusing’ Jerome Powell press conferenceThe Fed officials agree that they would start unwinding their loose monetary policies by the end of this year. But the nonfarm payroll (NFP) report earlier this month showed that the U.S. labor market had not recovered fully.That would prompt the Fed to hold its tapering plans, and any further delay could entail both Bitcoin strength and dollar-weakness.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Bitcoin is 'playing mind games' as its price coils into a tighter range

The general mood across the cryptocurrency market is one of anticipation on Sept. 17 as the price of Bitcoin has traded in an increasingly tighter range over the past couple of days and looks to be coiling in preparation for a move one way or another. Data from Cointelegraph Markets Pro and TradingView shows that the price of Bitcoin (BTC) has oscillated between $47,150 and $48,150 in trading on Friday as the lack of any major developments or headline-grabbing stories has led to a relatively flat day in the markets. BTC/USDT 1-day chart. Source: TradingViewA recent report from Delphi Digital suggested that last week’s sudden drop in Bitcoin price caught the market off-guard and led to a significant drop in market sentiment from greed to fear, and BTC’s price performance over the past week has been been a response to that as traders cautiously re-engage the markets. Fear & Greed index and 7-day moving average. Source: Delphi DigitalHere’s what analysts and traders are saying about the recent price action from BTC and what to keep an eye on as the market heads into the weekend. Bull flag forms on the 4-hour chartA positive take on Bitcoin’s price action was provided by the pseudonymous Twitter user ‘Pentoshi’, who posted the following tweet highlighting the formation of a bull flag on the 4-hour chart and a subsequent retest of a major support and resistance level at $46,800. $BTC tell me this wasn’t a perfect bull flag into a perfect S/R test into demand Breakout can reclaim PoB = moon soon Keep in mind alt supply, and ETF season ahead likely to be key drivers + disclosures4Hr chart below pic.twitter.com/1Em8mMXhOj— Pent◎shi Wont DM You (@Pentosh1) September 17, 2021As mentioned by Pentoshi, there are several upcoming developments that could lead to further bullish momentum in the market, chief of which is the growing list of Bitcoin ETF applications that must be ruled on by the U.S. Securities and Exchange Commission (SEC). Pentoshi also suggested that should a breakout occur that manages to recapture the point of balance (PoB) at $49,380, that could be a signal that the market is about to go on a run, making it an important level to keep an eye on.Bitcoin is “playing mind games” with the marketFurther insight into Bitcoin’s price action on lower time-frame charts was provided by crypto Twitter trader ‘Crypto_Ed_NL’, who described the recent moves from Bitcoin as “playing mind games” with the market. As highlighted in the chart provided, the price of BTC is consolidating below $48,000 now and has yet to provide signs of continuation, indicating caution for traders as a breakout higher is not a guarantee. That being said, Crypto_Ed_NL doesn’t think that this latest price pullback is “how we start a bigger move down,” hinting at the possibility of a potential move higher in the near future. Related: Next stop $85K for Bitcoin as analysts predict ‘explosive’ Q4 for BTC price actionBitcoin on track to close at a higher weekly lowAnalysis of Bitcoin’s price action on the higher weekly time-frame chart was provided by cryptocurrency analyst and pseudonymous Twitter user ‘Rekt Capital’, who indicated that Bitcoin is on track to having a favorable weekly close with a new weekly higher low if can manage to stay above $46,300. There is a well-defined support and resistance level near $48,930 that was the source of the current struggle to break out higher, and for now, BTC looks as though it will continue to consolidate in its current range. The overall cryptocurrency market cap now stands at $2.129 trillion and Bitcoin’s dominance rate is 42.1%.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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