Written by: BitpushNews
The Consumer Price Index (CPI) released on Wednesday showed that the core CPI index, excluding food and energy costs, rose 0.3% for the third consecutive month. Overall CPI was up 2.6% year-over-year, the first such increase since March this year.
After the new data was released, investors increased their bets on the Federal Reserve cutting rates at its December meeting. The FedWatch tool from the Chicago Mercantile Exchange shows that Wall Street is betting on a 25-basis-point rate cut at the December FOMC meeting with an 82% probability.
After the CPI data was released, US stocks opened flat but then rose. The major indices closed with mixed results. The Dow Jones Industrial Average rose slightly by 0.11%, the Nasdaq Composite fell 0.26%, and the S&P 500 was basically flat.
The crypto market saw significant volatility, with BTC earlier dropping to $86,300 before a bullish reversal, reaching a new all-time high of $93,500 during the session, and trading at $90,451.16 at the time of writing, up 2.91% in 24 hours.
Another major news in the crypto space is that Trump announced the establishment of the Department of Government Efficiency (DOGE), to be led by Elon Musk and Vivek Ramaswamy. This news has boosted Dogecoin (DOGE), which surged to $0.44 on Tuesday and retested that resistance level on Wednesday.
Coinbase Premium Index Rises to 7-Month High
CryptoQuant data shows that the Bitcoin Coinbase Premium Index (a key indicator of US demand) has jumped to 0.2, the highest level since April, highlighting the massive buying pressure from US traders.
The indicator measures the difference in Bitcoin prices between Coinbase and the offshore Binance (the world's largest crypto exchange by trading volume). Coinbase is widely used by US investors and institutions.
While it is unclear which types of market participants are buying, the spot BTC ETFs listed in the US saw strong trading volume on the day of their launch. According to Barchart data, the BlackRock iShares Bitcoin Trust ETF (IBIT) is the largest spot ETF with $40 billion in assets, and it traded around $1.2 billion in the first hour, making it the fourth-largest ETF by volume.
Likely to Enter a Consolidation Phase in the Short Term
According to Willy Woo, the founder of data platform Woobull and a statistician, BTC may consolidate further between $88,000 and $91,000 before attempting to break above the next major resistance level of $102,000.
Woo stated on X platform that when BTC breaks its all-time high, the market lacks historical data as a reference, and the price action becomes more volatile. Therefore, technical analysts often use tools like Fibonacci levels and liquidation levels to predict potential resistance levels.
Woo noted that BTC's recent price fluctuations have been in line with the Fibonacci and liquidation levels in the $88,000 to $91,000 range, indicating that the current price is in a relatively stable zone.
Looking ahead, Woo believes that $102,000 is the next important technical resistance level. This target is based on a Fibonacci analysis of historical cycle highs and the current cycle's low.
BTC Still in Early Stages, but Potential to Reach $500,000
In a report to clients on Tuesday, Bitwise Chief Investment Officer Matt Hougan wrote: "This is no longer the first inning. But it's still too early for BTC to reach $500,000."
Hougan said that while the market is expected to consolidate, "it feels like $100,000 is just around the corner."
He also believes that $500,000 per BTC is the right dividing line between early and late stages, as it would mark BTC's true 'maturity' and compare it to gold.
Hougan explained: "Currently, the total market cap of gold and BTC is around $20 trillion. If BTC can capture half of that market, then at the current circulating supply, the price per BTC would be $500,000." He further noted that central bank attitudes are a key driver of BTC's price appreciation.
Hougan believes that if central banks start to include BTC in their reserve assets, it would significantly drive up BTC's price. He cited the example of US Senator Cynthia Lummis' proposed "BTC as National Reserve" plan to highlight the potential of this trend.
The report stated: "If central banks start to follow suit, the $500,000 BTC target would no longer be far-fetched. But considering BTC's potential to drive the growth of the entire store of value market, and the reality of governments' ever-increasing debt and money printing, BTC's long-term price potential may be even higher than that - potentially reaching $1 million or more."
