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- Bitcoin has achieved new highs in more than 2 months crossing $45k
- Analysts expect that inflation will soar by more than 0.5% in July’s report
- The July inflation report will be published on Wednesday
- Bulls are responding positively to the upcoming inflation report that will be published by the US Bureau of Labor Statistics
- BTC entities amount has surged to achieve a new all-time high
- Increasing demand for BTC led to a supply shock
Bitcoin has been facing turbulence in recent months. Since the mid-May crash, the cryptocurrency was trading in the range of $30k to $40k. However, recently, we have observed that the leading crypto coin hits its highest level in more than two months. According to the data from CoinMarketCap, the coin designed by Satoshi Nakamoto hits $45,000 ahead of the July inflation report. Moreover, it is expected that inflation will rise by another 0.5% in July. However, one fractal hints at a looming correction.
Strong momentum observed in the crypto market
Bitcoin climbed 1.65% to above $45k this weekend. Indeed, the cryptocurrency continued the upside momentum that has already seen it jumping from its low last week’s low.
On the other hand, we also have observed that some of the rival altcoins are also strong. Ethereum, which is currently the second-largest crypto in terms of market cap as per coin market cap, has increased by more than 29%.
Bitcoin bulls respond positively to the inflation report
Coming Wednesday, the US Bureau of Labor Statistics will release July’s inflation report. Notably, the report will be published with markets forecasting a 0.5% spike in the inflation chart. Indeed, such projections appeared after observing the consumer price index (CPI) soaring to 5.4% year-over-year logging its biggest increment over the past 13 years.
Following the scenario, Bitcoin bulls have been observed positively in the recent reports. The investors have effectively guarded the flagship digital currency against falling below $30k after the mid-May crash. Simultaneously, the bull’s efforts to push the price above the benchmark level of $40,000 lead to a steady upside break above $45k. Hence, the factor indicates a strong demand for the coin designed by Satoshi Nakamoto.
New BTC entities continue to hit an ATH
Recently, Lax Moskovski, chief investment officer at Moskovski Capital observed a dramatic spike in entities entering the BTC network. He matched the growth with the rising Bitcoin and US dollar pair, highlighting in a Glassnode chart. Hence, Lax stated that the amount of new BTC entities have hit a new all-time high.
Additionally, Willy Woo, an on-chain data analyst mentioned that BTC’s momentum should push its price above $50k. And cited the supply-demand imbalance in the cryptocurrency market. Moreover, Woo highlighted that all investor cohorts were acquiring the flagship cryptocurrency, which led to a supply shock.
Risk of dead cat bounce associates with a climb
Observing the previous top to bottom Fibonacci retracement fractals, it seems that the BTC climb does carry risks of becoming a dead cat bounce. After setting up record highs, BTC tends to correct toward its 200-week exponential moving average, where it eventually bottoms out to pursue another bullish cycle.
Notably, if the fractal repeats, Bitcoin could face extreme resistance at more than 61 Fib levels above $46k. Ultimately, the leading cryptocurrency will correct lower to its 200-day EMA, which currently sits below the $20k price level.
