The Bitcoin rally after the July Consumer Price Index release has lost its momentum.Bitcoin suffered sharp and significant losses, falling close to 10% within 24 hours.Ethereum, which was showing bullish movement following progress in the Ethereum merge, also declined heavily.
Reports highlighted that over half a billion dollars worth of crypto was liquidated as BTC and ETH plummeted.However, a new key indicator reveals that Bitcoin is set to be extremely bullish.
The Hash Ribbons Indicator has just given the buy signal for Bitcoin.According to many experts, the Hash Ribbons indicator is one of the most meaningful for Bitcoin.Every time this has happened, BTC has gone up by at least 65%.
Why The Bitcoin Price Was Plummeting
Bitcoin price went up significantly after the release of the Consumer Price Index.The CPI, released by the US Bureau Of Labor Statistics, was lower than estimated.
This highlighted cooling inflation after months of record highs.
In addition, the US GDP showed negative growth for two consecutive months.
This meets the technical criteria for a recession.The two factors led everyone to believe that the Fed will pivot from its hawkish stance.
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However, the release of FOMC minutes and the public comments made by certain Fed officials speak otherwise.Some of the historically dovish Fed officials, like the President and CEO of Minneapolis Fed, Neel Kashkari, have highlighted that he is in favor of a tough stance against inflation.The traditionally hawkish officials like James Bullard of St.Louis have also shown no signs of a pivot.
Moreover, experts have pointed out that Bitcoin traders may also be factoring in conditions in Europe.The U.K.is already struggling with double-digit inflation.Meanwhile, Germany’s producer prices have surged by more than 37%.
As a result, BTC dropped significantly and sharply.
How Will BTC Prices React
BTC is yet to show any movement in response to the buy signal from the Hash Ribbons Indicator.However, experts believe that it is only a matter of time before traders start accumulating again.
BTC is currently trading at $21,290.
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