Bitcoin (BTC) continued its current correction with a drop below $59,000 on Thursday. The alpha cryptocurrency may have been affected by news from the Consumer Price Index report that inflation rose 0.2% in September, which was a higher-than-expected increase.
Rising Inflation and SEC Action Put Pressure on $BTC
The possibility of a resurgence in inflation could once again be a concern for the US Federal Reserve. With the release of September inflation figures on Thursday, it was found that the CPI rose 0.2%, while the core CPI rose 0.3%.
While this news may have contributed to the sharp 3.6% drop in Bitcoin price, it also didnât help matters when it was reported that the Securities and Exchange Commission (SEC) would sue prominent market maker Cumberland DRW for allegedly trading cryptocurrency securities.
Cumberland DRW's response to its X-account is a strong rebuttal to the SEC's allegations:
$BTC Price Starts to Recover
Despite what could be interpreted as negative news, the price of $BTC has rebounded strongly after dropping below $59,000. Currently up more than 3% year-to-date, it can be seen in the short-term chart above that $BTC has been able to hold above $59,680 and has also risen above the psychological level of $60,000.
The triangle that the price is currently in could be about to break out to the upside. This breakout, if successful, coupled with the positive upward reading from the Stochastic RSI, could allow the price to continue rising.
The bulls' first target would be a higher high at $64,550, followed by the next higher high at $66,500. However, to really start turning things around, Bitcoin bulls would need to push the price back above the previous high of $70,000.
$BTC $61,000 Still Holding Support
On the higher time frame of the week, it can be seen that despite the recent drop in $BTC, the price continues to hold the crucial support level of $61,000. The wick below this support level is evidence that buyers are buying back the price.
At the bottom of the chart, the Relative Strength Index (RSI) shows a breakout of a descending trendline. The indicator line is currently pointing down, but if Bitcoinâs recovery continues with enough strength, this could change later this week, signaling that buyers are returning to the market.
