Bitcoin price surges

Kamal531

After the US dollar CPI data was released, the Bitcoin price broke through the range channel, and breaking $27,000 could potentially push Bitcoin to $30,000.

The reaction of the BTC price to the US Consumer Price Index (CPI) continues to surprise many, with the US CPI rising by 0.6%, exceeding economists' expectations, and rising by 0.4% compared to July's 0.2%. The real-time price of Bitcoin has successfully reclaimed the $26,000 support level and is currently pushing for gains above $27,000, as bulls break free from a multi-week range channel.

The CPI year-on-year increase is 3.7%, surpassing the market observers' forecast of 3.6% and July's 3.2%. The US economy's core CPI (excluding energy and food prices) rose by 0.3%, compared to an expected 0.2%, and a rise of 0.2% in July. Compared to the same period last year, core CPI has fallen to 4.3%, in line with economists' predictions, a significant drop from July's 4.7%.

The positive reaction of Bitcoin to the CPI data has led to a bullish sentiment throughout the market, with market capitalization rising by 1.1%, almost breaking through the $1.1 trillion market. Bitcoin occupies over half of the cryptocurrency market, with a value of $518 billion.

However, trading volume has slowed to $12 billion, indicating that investors are choosing to hold BTC for long-term speculation rather than short-term trading.

Chain data from Glassnode and Blockware Solutions confirms the claims of long-term holders. Bitcoin's circulating supply has fallen 5.4% this week to 19.4 million.

This supply decrease, along with expectations of the upcoming halving, could lead to a surge in Bitcoin prices.

"Prices are set marginally, which means those who trade Bitcoin back and forth will drive short-term price trends," Blockware Solutions said in an email statement. "As supply-side liquidity continues to tighten, as evidenced by the reduction in supply exchange volume, any demand catalyst will cause prices to soar."

The circulating supply of Bitcoin has been dormant for the past year, accounting for 70%, and investors are more willing to buy and hold. According to Glassnode's data, long-term holders account for 75% of the circulating supply.

Bitcoin Price Chart Bottoming Out
Climbing from the $25,000 support level reduces the likelihood of BTC dropping to $22,000 in search of liquidity. However, as shown in the chart, continued breakthroughs in the range channel enhance the bullish momentum and increase the likelihood of reaching the target above $30,000.

If traders heed the call to buy Bitcoin from the Moving Average Convergence Divergence (MACD) indicator and increase their bullish positions, a price surge is likely to occur. Keep in mind that the decrease in circulating supply indicates rapidly increasing demand, driving up the price of Bitcoin.

Although Bitcoin has not yet emerged from its predicament, breaking through the 200-day Exponential Moving Average (EMA) (purple) and the subsequent descending trendline above could be a point of no return as BTC price rapidly climbs to $30,000.

Considering potential profit-taking pressure at $27,400 and $28,200, this ascent may be locked in before breaking the psychological resistance level of $30,000. On the downside, the support areas at $26,000 and $25,000 will remain intact, so if they weaken, Bitcoin could eventually fall to $22,000.