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Bitcoin (BTC) struggled to break a key resistance level on Thursday despite a positive US inflation report, continuing the downward trend observed since early June.
Bitcoin Bulls Failed Post-CPI
On Thursday, US consumer prices fell to their lowest level in the last year. This initially favored higher-risk assets, including BTC.
For a moment, it looked like Bitcoin bulls could establish a foothold above the descending trend line that characterized the sell-off from June highs around $72,000.
Such a bounce would mark the end of the pullback and potentially spur momentum investors into action.
However, bullish hopes were quickly dashed as prices rebounded from trendline resistance and dropped below $57,000 earlier today.
This latest bull failure, occurring despite positive macroeconomic news, could point to further price weakness ahead. The rejection of a similar trend line on July 1 led to deepening selling.
In addition, Germany’s Bitcoin sell-off, which contributed to the price drop earlier this month, has come to an end. Because the German Government has a small number of Bitcoins left.
On the other hand, Mt. Uncertainty remains regarding the liquidation of 95,000 BTC, part of the total 140,000 BTC planned to be distributed to Gox’s creditors.
“The possibility that some of the $16.3 billion FTX redemption will translate into buying pressure in the coming months is fueled by the increasingly positive stance on crypto on both sides of the aisle and a rate cut in September that will benefit risk assets more generally,” crypto broker FalconX said in a newsletter today. “The potential should encourage medium- and long-term bulls,” he said.
*This is not investment advice.
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