Bitcoin Brutalized After August CPI Data Release
In this episode of NewsBTC’s daily technical analysis videos, we take a look at Bitcoin price action following today’s selloff in reaction to August CPI numbers.
Take a look at the video below:
BTCUSD Buy Signals At Risk After CPI Selloff
The selloff really was immediate. When looking at the one-minute candle, Bitcoin lost over 6% in value in a minute or two. Sell orders executed within seconds of CPI numbers being released.
The selloff is notable as it is putting many of the buy signals from the weekly open in yesterday’s video at risk. These signals appeared at the open of the weekly session, which means a close this week was always required to confirm the signals.
Quite the dump the second CPI numbers were released | Source: BTCUSD on TradingView.com
Bitcoin Bottom Fractal Features Similar Selloff Ahead Of Breakout
The 2018 Bitcoin bear market bottom had a selloff that was very similar to today’s price action and resulting candlestick.
Using nothing more than an arrow placed at both of these key moments, when zoomed out on the weekly the selloffs both occurred just as these important buy signals were triggered on weekly timeframes.
The weekly buy signals are now at risk | Source: BTCUSD on TradingView.com
Related Reading: WATCH: Bitcoin Bottoms As Easy As Pi? | BTCUSD September 9, 2022
Could The Top Crypto Close The Year Back At $40K?
The timing of the pullback today is eerily similar to the 2018 bear market bottom, according to a fractal placed below the current price action. In this instance, Bitcoin never made new lows, but instead simply moved sideways for several more weeks to draw in more short interest.
The cryptocurrency then rallied by more than 300% in three months. If the fractal continues to be followed, Bitcoin price could end the year at around $40,000 per coin.
Will BTC close above $40K to end the year? | Source: BTCUSD on TradingView.com
More Downside Instead? What The Bearish Scenario Looks Like
Of course we’d be foolish to rule out more downside considering the bearish macro backdrop. Taking a fractal from the last correction, we could have a roadmap for the last leg down.
The fractal has Bitcoin price terminating the pattern only a few hundred dollars away from the 2019 peak and would complete an expanded flat pattern.
What another leg down could look like | Source: BTCUSD on TradingView.com
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Featured image from iStockPhoto, Charts from TradingView.com