Why is Bitcoin price up today?

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Why is Bitcoin price up today?
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Bitcoin (BTC) price is up today, holding steady above its psychological support of $30,000 as traders await key U.S. inflation data.

Related: Bitcoin trader eyes BTC price ‘Darth Maul candle’ as CPI due 2-year low

Steady inflation hopes keep Bitcoin up

BTC price saw modest daily gains of 0.68% on July 12 as a part of an extended rebound that started on July 7. Since then, Bitcoin’s price has added nearly 3.75%.

BTC/USD daily price chart. Source: TradingView

Bitcoin’s upside comes ahead of the release of the U.S. consumer price index (CPI) print on July 12. A Bloomberg survey shows that most economists anticipate the headline and core inflation to continue moderating in response to the Federal Reserve’s hawkish policy.

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In the last meeting, the U.S. central bank decided to pause its interest rate hikes as its Chair, Jerome Powell, hinted at resuming raising rates afterward if inflation data disappoints. But, if the CPI cools, the Fed may consider a prolonged pause, Bloomberg reports.

Meanwhile, the U.S. dollar index (DXY) had reached its worst levels since May, dropping four days in a row by 2.15%. The greenback’s weakening versus a basket of top foreign currencies hint at a slowing appetite for safe-haven among global investors.

DXY weekly price chart. Source: TradingView

Bitcoin, a perceived risk-on asset, has likely benefited in recent days, given its consistently negative correlation with the dollar in 2023.

Lower exchange BTC supply

Bitcoin’s gains on July 12 also coincide with its supply on exchanges dropping to the lowest level in five years.

BTC balance on exchanges. Source: Glassnode

The market perceives coins leaving crypto exchanges as a bullish signal, given traders withdraw their BTC typically when they want to hold long term. 

Related: Cathie Wood’s ARK sells 135K Coinbase shares as price hits $90

Interestingly, on-chain data shows that Bitcoin HODLers have accumulated coins throughout 2023 at the rate of nearly 27,000 BTC per month. In other words, most Bitcoin investors are positioning for a BTC price rally in the coming months.

Bitcoin hodler net position change. Source: Glassnode

Bitcoin price outlook for July

From a technical standpoint, BTC/USD is eyeing the $31,000-31,500 range in July. This range coincides with Bitcoin’s main resistance level, which is part of a sideways consolidation channel.

BTC/USD daily price chart. Source: TradingView

Conversely, a reversal now or after testing the $31,000-31,500 range could have BTC price test the channel’s lower trendline near $29,900 in July. Traders should keep an eye out for the Fed’s next rate decision on July 25-26 as a potential catalyst.

Collect this article as an NFT to preserve this moment in history and show your support for independent journalism in the crypto space.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.



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