Today is a big day, watch out, we are going to see a huge move in the Bitcoin and cryptocurrency markets over the next 24 hours. I will talk about why this is happening and more importantly, I will show you this chart.
First let's look at the analysis of Bitcoin. Now let's look at the trend of Bitcoin on the 4-hour timeframe. Yesterday we saw a pullback, continuing the downward trend. We had a low of $65,800 and even below $66,000. But at least we saw a rebound and now the price is oscillating above the orange line at $66,500. So why did such a drop happen? Because yesterday there was a movement in a Bitcoin whale wallet. This wallet has been dormant for 5.5 years, meaning that no transactions have occurred in 5.5 years. They have about 8,000 Bitcoins, worth $535 million. Yesterday they moved this money to multiple addresses, including Binance, where there are 1,416 Bitcoins. So there was some panic in the Bitcoin market yesterday. In addition, we can also see that miners are doing small liquidations, and they are selling their Bitcoin as fast as possible to make ends meet. This is also confirmed on the chart, miners are selling a lot of Bitcoin to OTC desks, and then these Bitcoins may be sold to institutions, such as Black Rock. This may also explain why there have been such large inflows in ETFs in the past few weeks. So while we’ve seen some factors impacting the price in the short term, I think Bitcoin is still in a pretty good shape.
Next, let's look at Ethereum. Ethereum fell again yesterday. You know, we've seen a huge red candle since we lost the key support level of $3,674 for Ethereum. I think we could fall to $3,267, which is the next support level. If Bitcoin falls again, I think Ethereum will fall as well. But I've been saying that I think this is a very good buying opportunity for Ethereum. As for the traditional markets, you can see that the traditional markets are at all-time highs right now. This provides more fuel for Bitcoin to rise. I think Bitcoin will start to outperform the traditional markets again soon. Sometimes they will rise in sync, and sometimes you will see the traditional markets rise and Bitcoin trend down, but usually it's just a good buying opportunity, and then Bitcoin usually catches up afterwards.
So why is today so important? Because we have a ton of data coming out. First up is the core inflation rate, the monthly and annual inflation rates, then the headline inflation rate, plus the federal rate decision, federal economic forecasts, and a federal media release. Tomorrow's CPI inflation data is very important, and almost every major bank is expecting CPI inflation to hit 3.4%. But the market is telling us a more nuanced story, with the forecast market currently showing a 17% chance of CPI inflation exceeding 3.4%. If CPI inflation exceeds 3.4% tomorrow, it would mean that inflation has risen for three consecutive months. On the other hand, there is a 41% chance that CPI inflation will be below 3.4%. With this news out, we will have the long-anticipated June federal meeting. So what will happen today? Obviously, if inflation is higher than expected, that's bad for the market.
If inflation is lower than expected, that's good for the market because the market will think we might see some rate cuts. So the whole world will be watching these data releases to see how the market reacts. Do we have some data that can predict what we might see? Let's look at a chart now, when we have a downtrend, especially a downtrend like we are having now, we usually see a big rally. We've seen this after the last few federal meetings, such as in early 2024, early 2023, and early 2022.
This chart tells us that when we have experienced a downtrend before, especially in a situation like now, we usually see a big rally. So by this logic, if we see lower inflation than expected, I expect the price of Bitcoin to quickly break through $72,000. So let's keep an eye on this, very important day, and we will see what happens. Let me know in the comments what you think will happen. That's it for you all, thank you very much for reading, and I'll see you next time.
