Risky assets rallied in the wake of US inflation data, but the belief that a sustained uptrend would emerge is almost nowhere to be seen.
On August 11th it broke the top of a stubborn trading range and risky assets were certainly captivated by a freak rally.
BTC/USD 1-hour candlestick chart (Bitstamp). Source: TradingView
Bitcoin correction alerts intensify near $25,000
Data from Cointelegraph Markets Pro and TradingView showed that the BTC/USD pair hit $24,750 on Bitstamp, its best performance since June 13.
The pair made several attempts to reach the top of the range in the past weeks, all of which failed in the face of strong selling pressure.
Fresh US inflation data released this week provided a long overdue catalyst for change, but bitcoin and altcoins rose along with stocks as July CPI pressure suggested inflation had peaked.
On the day of the announcement, Aug. 10, the S&P 500 and the Nasdaq Composite were up 2.1% and 1.9%, respectively. On the other hand, the BTC/USD pair saw a daily candlestick near $900.
However, market commentators were only overall bullish as the dust settled, rather than optimism piling up. Investor Raoul Pal noted that sentiment sees a rise in CPI after CPI as a black sheep.
“Well, this looks like one of the most hated stock advances I’ve seen in a few years,” he said in a private message to his Twitter followers.
However, Pal said there is a “very good chance” of stocks bottoming out in June.
Meanwhile, the famous trader and analyst Il Capo of Crypto, who predicted a big change in crypto, held $25,500 as the maximum possible target before starting a new downtrend.
“$BTC up almost 40%. Most likely, Trackback is coming. Buy The Dip,” another Jibon account followed on Twitter.
Meanwhile, a slightly more optimistic Tony Crypto said that scammers would be “in for a banquet” if he could keep the range high.
Noting potential similarities between the current Bitcoin chart and the March 2020 chart, BTCfuel added that no further hacks are likely.
Doubts arise about the Ethereum pool
Meanwhile, the cryptocurrency’s impressive performance reveals the largest altcoin, Ether
ETH/USD came into the limelight after gaining more than 11%.
Related: Bitcoin Dominance Hits 6-Month Low as Metric Announces New ‘Down Season’
The pair extended its intraday gains, breaching the $1,900 level for the first time since June 6, and is now approaching the psychologically important $2,000 level.
CPI momentum has been added to the already exciting Ethereum market with the Goerli testnet merger, an important preparatory step for the full merger event in September.
Since the beginning of this bear rally in mid-June, Ethereum has gained dominance over Bitcoin in terms of trading volume. Maartuun, a contributing analyst at on-chain data platform CryptoQuant, stated in a blog post in August.
Maartuun cautioned that historical precedent does not support a sustainable rally across cryptocurrencies if ETH dominance continues anyway.
“Ethereum is clearly very popular on exchanges due to its dominance. This makes sense given the upcoming merger 2.0.”
However, in my 5 years of experience in the cryptocurrency market, the Ethereum led pools are generally not the healthiest for the market. As you can already read in my previous analysis, I am very conservative. Especially since Ethereum has already made a >100% move from the bottoms.”
ETH/USD candlestick chart for one day (Binance). Source: TradingView
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