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Bitcoin Price Analysis: US CPI, Fed Rate Decision Spark $2.8 Billion BTC Signal

By:
Ibrahim Ajibade
Updated: Jun 12, 2024, 19:27 GMT+00:00

Key Points:

  • Bitcoin price peaked at $69,980 on Wed June 12, as US Fed's rate pause sparked positive reactions across the crypto markets.
  • BTC price surged 6% within the daily timeframe while over $32 million SHORT positions got liquidated.
  • Following the US Fed rate decision, Bitcoin bulls rapidly mounted leveraged LONG positions worth $2.81 billion in attempts to accelerate the bullish momentum.
Bitcoin (BTC) price forecast

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Bitcoin price peaked at $69,980 on Wed June 12, as US Fed’s rate pause sparked positive reactions among crypto investors, critical BTC derivatives market data suggests more upside could follow. 

Bitcoin price bounces 6% After US Fed Rate Pause

On Wednesday June 12, 2024, Bitcoin price surged 6% following the dovish outcome of US Federal Reserve 4th FOMC meeting of the year. Crucially, the US Consumer Price Index (CPI) data showed that core inflation slowed considerably in May 2024, beating markets analyst expectations.

Bitcoin Price Action after US Fed Rate Decision (BTC/USD)
Bitcoin Price Action after US Fed Rate Decision (BTC/USD)

While the Fed settled on another rate pause, the cooling inflation raised optimism that the US economy will head into a soft-landing and avoid a full-blown recession in 2024 as initially feared when the Non-Farm Payrolls data shows overheated figures last Friday.

Bitcoin price surged as high as $69,980 in the aftermath of the Fed Rate announcement on June 12, reflecting an instant 6% rebound from the 20-day low of $66,100 recorded on Tuesday.

SHORT Traders Lost $35 Million amid BTC Price Rebound

Judging by the upward price movement, Bitcoin bull traders swung into action to make rapid purchase in the spot markets after the FOMC meeting. However, the rare derivative trading trends observed shows that the bullish activity was not limited to spot markets alone.

$32 Million Bitcoin SHORT Contracts Liquidated after US Fed Rate Decision | June 12, 2024 | Coinglass
$32 Million Bitcoin SHORT Contracts Liquidated after US Fed Rate Decision | June 12, 2024 | Coinglass

During the buying frenzy, SHORT traders in the were caught in the crosshairs. According the Coinglass data, over $32 million worth of BTC SHORT futures contract positions wiped out within the daily timeframe on June 12.

Rapid SHORT liquidations during a price rebound phase can be interpreted as a bullish signal for a few reasons. Firstly, it suggests that bears are succumbing to the doming bullish catalysts, and are actively closing out their SHORT positions.

With minimal short-induced resistance, BTC price looks set to continue on its upward trajectory as the week unfolds.

Bitcoin Price Forecast: Bulls Mount $2.8 Billion Leveraged Positions

Bitcoin price is hanging comfortably above the $69,500 mark at the time of publication on June 12. But insights from the derivatives markets show that BTC bulls are anticipating another leg-up towards the $71,000 territory.

Coinglass liquidation map data which compares the value of active LONG contracts against the SHORTs, also affirms this bullish BTC price outlook.

As seen above, Bitcoin bulls have mounted LONG positions $2.81 billion worth of leveraged positions within the 20% boundaries of the current price. Meanwhile the active SHORT contracts are worth less than $1.35 billion.

Long positions exceeding the value of SHORTs by over $1.5 billion means that the bulls are in the driving seat. And given the alignment of the short positions, BTC price looks like to hit the $70,500 level before facing a significant resistance cluster.

Bitcoin Price Forecast BTC/USD
Bitcoin Price Forecast BTC/USD

Within the current market dynamic, bears stand to lose $1 billion if Bitcoin price exceed the $70,300 mark. To avoid such large losses, BTC bears will deploy stop loss orders and stage massive sell-offs to derail the rally.

But if BTC price gains sufficient momentum to power through that resistance cluster, bulls could set their sights on new all-time highs above $72,000.

About the Author

Ibrahim Ajibade Ademolawa is a seasoned research analyst with a background in Commercial Banking and Web3 startups, specializing in DeFi and TradFi analysis. He holds a B.A. in Economics and is pursuing an MSc in Blockchain.

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