Bitcoin Technical Analysis: Traders Anticipate US Inflation Data Amidst Tight Trading Range 

The crypto market is abuzz with the prospects of bitcoin exchange-traded funds (ETFs), sparking a rush of investments in anticipation of their approval. Investors and traders are bracing for the U.S. inflation report due to drop on Tuesday, which historically shakes up market sentiment and could tip the scales for future Federal Reserve rate hikes.

Bitcoin

Bitcoin (BTC) has consolidated a great deal over the weekend and is currently moving in a tighter triangular pattern. So far while remaining range bound, the relative strength index (RSI), a key gauge of price momentum, suggests bitcoin is still trading in overbought territory with a reading of 77, hinting at more price pullbacks.

Bitcoin’s price has been between $36,692 and $37,291 per coin during the past 24 hours. The leading crypto asset’s trade volume on Monday is around $11.63 billion, while BTC’s market cap is $720 billion. The price is still up 4.2% and 30-day statistics show a rise of 36% against the U.S. dollar.

Meanwhile, the Stochastic oscillator sits at a neutral 76, barely shy of the overbought distinction, which may imply a plateau in bitcoin’s upward thrust. A Stochastic value hovering near the threshold can often foreshadow a phase of market stabilization and range-bound action or slight corrections as part of the natural ebb and flow of trading patterns.

Bitcoin chart by TradingView

Adding to the bearish outlook, the commodity channel index (CCI) of 130 corroborates an inclination towards selling, echoing the sentiment suggested by the RSI. The CCI’s role in signaling new trends or extreme conditions becomes particularly significant when its readings climb past the typical overbought level of 100, casting a spotlight on the potential for a trend reversal.

In contrast, the allure of the bullish trend is still maintained by bitcoin’s moving averages, with the 10-day simple moving average (SMA) and exponential moving average (EMA) indicating optimistic market sentiment at respective values of $36,133 and $36,232. The longer-term 20 and 30-day averages also advocate for sustained upward momentum, standing well below current price levels, painting a picture of enduring bullish sentiments.

Bull Verdict:

The prevailing bullish signals from bitcoin’s moving averages may trump short-term overbought concerns, suggesting that the underlying momentum remains strong. If historical patterns hold true, the dip indicated by the RSI may be a natural breather, offering a buying opportunity before the next upward swing.

​​Bear Verdict:

Despite bullish trends in moving averages, the overbought signals from the RSI and CCI hint at a market that’s ripe for a correction.

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