Pre Open US - Bitcoin 10 Aug 2023

The upcoming Consumer Price Index (CPI) inflation data is set to be published by the US Bureau of Labor Statistics on August 10. Analyzing on-chain data suggests that there's a possibility of another Bitcoin (BTC) price rally, given the positive market response to the previous month's release.

The impact of the monthly CPI data on BTC prices has strengthened due to increasing Bitcoin adoption among governments and institutional investors. For instance, following the July 12 CPI data release, Bitcoin's price surged by 4%, reaching a new peak for 2023 at $31,500. The question now is whether Bitcoin can achieve a similar feat once again.

Historical data illustrates that Bitcoin has often experienced rallies when the market anticipates a decrease in CPI or a modest increase. For instance, the CPI data from July 12 indicated a mild inflation increase of only 1% in the prior month. In response, Bitcoin's price had risen by 5% in the week leading up to the release, followed by another 4% rally afterward, resulting in a new 2023 peak.

A comparable pattern has emerged in the current week. As of August 9, BTC's price closed at $29,900, reflecting a 4% increase from August 7. On-chain data suggests that crypto traders have been preparing for another round of optimistic price movement following the August 10 CPI release.

Technically, on the daily chart, it appears that yesterday's breakout on shorter time frames might be false, given that the price action is still clinging to the resistance level of 29790. A genuine breach of the current resistance could propel the price towards 31000, while a selloff might lead BTC back to the 100-day moving average on the daily chart.