The largest cryptocurrency, Bitcoin (BTC) is currently concentrating on regaining the $18,000 level as it exhibits potential positive breakthrough indicators. There has been a shift in social perceptions of Bitcoin as a result of the asset’s strong rise above $17,000.
The social “Fear and Greed Index” for cryptocurrencies has in fact reached a 30-day high of 30 points as of December 14. Notably, according to information provided by Alternative.me, the cross-market sentiment index last rose in rank on November 8 when it reached 31.
The line in the chart above represents the most recent reaction of Bitcoin to recently released Consumer Price Index (CPI) and inflation data that were less than anticipated. The cryptocurrency rose just like traditional markets did. The data was actually a relief because it showed that the Federal Reserve’s efforts to control inflation were succeeding.
It is important to remember that the indicator provides investors with indications about potential future price movements through an assessment of the overall market. In this line, rising readings indicate that the index is probably headed toward greed, a condition linked to lots of buyers, while falling readings indicate the opposite.
The annual rate of inflation in the United States in November was 7.1% as opposed to the forecasted 7.3%, and the monthly CPI was 0.1% lower than the forecasted 0.3%.
As Bitcoin continued to trade below the important $20,000 level after being pushed down by inflation, panic has recently taken control of the market. As a result of the failure of the FTX cryptocurrency exchange, Bitcoin’s potential for a bull run was also nullified.
Currently, Bitcoin is trading at $17,843 and the daily chart shows gains of about 4%. The weekly report reveals that Bitcoin is gaining close to 6% and is currently trading in the green.
In addition to the positive effects of the inflation report, the bulls’ support is still needed for Bitcoin to retake the $18,000 position. The recent relative strength of the Bitcoin bulls and bears should be kept in mind.
Investors in Bitcoin will also be keeping an eye on other developments in the cryptocurrency world, such as the detention of FTX founder Sam Bankman-Fried and potential legal action against Binance in the US. However, the cryptocurrency community and significant other market participants continue to be optimistic about the prospects for Bitcoin and the crypto industry as a whole for the upcoming year.