Incoming CPI data is set to shock markets while Bitcoin traders are eyeing the event as a potential “short-term bounce” catalyst.
Bitcoin (BTC) attempted to reclaim $40,000 as support on April 12 after a troubling start to the week saw BTC/USD hit three-week lows.
“Extraordinarily elevated” CPI data due
Data from Cointelegraph Markets Pro and TradingView showed the largest cryptocurrency bouncing to $40,200 on Bitstamp Tuesday after falling to just $39,300.
Spurred on by a bleed-out in tech stocks in particular, Bitcoin looked decidedly unappetizing on short timeframes, and those previously betting on bullish continuation were left empty-handed.
According to on-chain monitoring resource Coinglass, the past 24 hours cost crypto traders a total of $428 million in liquidated long positions — the most in a day since Jan. 22.
“This roll over in tech is effecting BTC as well,” Blockware lead insights analyst William Clemente wrote in a Twitter thread on the current climate.
“Whether I agree or not, the market appears to be viewing BTC as a high beta play on tech, trading at an increasing correlation over the last month.”
The comments echoed those of former BitMEX CEO Arthur Hayes, who on Monday had forecast BTC/USD dipping to $30,000Â as a result of the macro setup.
Adding insult to injury for the U.S. economy and associated sentiment, meanwhile was the latest Consumer Price Index (CPI) print due later on the day. Already at a 40-year high, the March readout is tipped to reinforce inflationary pressure as the first CPI data to be made public since the start of the Russia-Ukraine war.
The White House now warning of “extraordinarily elevated” inflation data.
This upcoming March CPI print is likely going to extremely ugly.
— Dylan LeClair (@DylanLeClair_) April 11, 2022
CPI events have historically tended to induce short-term volatility in crypto markets, making Tuesday’s publication time of 8:30am Eastern time of particular importance for traders.
Some, therefore, were considering the odds of downside pressure easing once the data is made public.
Whale support means $27,000 is “max pain”
Analyzing support levels where large-volume investors had bought BTC, meanwhile, fellow on-chain analytics platform Whalemap declared $27,000 as the “max pain” point for the market.
Related:Â Bitcoin price drops to $39K, but data shows leverage traders dreaming of $50K
“$41,600 unfortunately did not hold. $38,400 is the new closest on-chain support,” it summarized on Twitter.
An accompanying graphic showing whale positions nonetheless showed that $41,600 “should have” held thanks to buyer interest.
As Cointelegraph reported, meanwhile, some whales have been filling their bags below $45,000.
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