Bitcoin has reached new weekly highs as US macroeconomic data eased market concerns over inflation, edging closer to the significant $100,000 mark. This surge comes in response to the latest US Consumer Price Index (CPI), which met market expectations without any unexpected inflationary pressures, easing fears tied to rising consumer prices. The strengthening of Bitcoin’s price also coincides with a decline in the US dollar’s strength, positioning Bitcoin to challenge its downward trajectory since mid-December highs.
Market analysts note the potential for increased volatility, with the cryptocurrency market responding positively to economic signals. Nonetheless, some analysts, like QCP Capital, urge caution, suggesting the $90,000 support might be re-tested as uncertainty prevails around the incoming US administration under President-elect Donald Trump. The volatile nature of Bitcoin’s price movements is emphasized by the currently narrow Bollinger Bands, an indicator known to herald significant price swings.
Matthew Hyland, a long-time market commentator, highlights this narrow band pattern, hinting at substantial price fluctuations in the near future. Meanwhile, traders remain alert to market dynamics and potential rapid developments, balancing optimism against persistent caution regarding support levels and overall market fragility.