Bitcoin is in a short-term consolidation, with a target range of $88,000 to $91,000

Author: BitpushNews

The Consumer Price Index (CPI) released on Wednesday showed that the core CPI, excluding food and energy costs, rose by 0.3% for the third consecutive month. The overall CPI increased by 2.6% compared to the same period last year, marking the first year-on-year growth since March of this year.

Following the release of the new data, investors increased their bets on the Federal Reserve cutting interest rates at the December meeting. The FedWatch tool from the Chicago Mercantile Exchange showed that Wall Street's bets on a 25 basis point rate cut at the December FOMC meeting rose to 82%.

After the CPI data was released, U.S. stocks opened flat and then rose slightly. Major indices closed mixed. The Dow Jones Industrial Average rose by 0.11%, the Nasdaq Composite fell by 0.26%, and the S&P 500 index was basically flat.

The cryptocurrency market experienced significant volatility, with Bitcoin earlier dropping to $86,300 before a bullish rebound, reaching an all-time high of $93,500 during the session. As of the time of writing, Bitcoin was trading at $90,451.16, up 2.91% over the past 24 hours.

Another major news in the crypto space is Trump's announcement of the establishment of the Department of Government Efficiency (DOGE), which will be led by Elon Musk and Vivek Ramaswamy. This news spurred a rise in Dogecoin (DOGE), which soared 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 Coinbase premium index for Bitcoin (a key indicator of U.S. demand) has surged to 0.2, the highest reading since April, highlighting significant buying pressure from U.S. traders.

This indicator measures the difference in Bitcoin prices between Coinbase and offshore Binance (the largest cryptocurrency exchange by trading volume globally), with Coinbase being widely used by U.S. investors and institutions.

While it is currently unclear what types of market participants are buying, trading volume was strong on the day the spot Bitcoin exchange-traded fund (ETF) listed in the U.S. According to Barchart data, the BlackRock iShares Bitcoin Trust ETF (IBIT) is the largest spot ETF, with assets totaling $40 billion, and saw approximately $1.2 billion in trading volume in the first hour of trading, making it the fourth-largest product by trading volume among all ETFs.

Potential for a Consolidation Phase in the Short Term

According to Willy Woo, founder of the data platform Woobull and a statistician, BTC may experience more consolidation between $88,000 and $91,000 before aiming for the next major resistance level of $102,000.

Woo stated on the X platform that when Bitcoin breaks through historical highs, the market lacks historical data for reference, making price movements more volatile. Therefore, technical analysts often use tools like Fibonacci levels and liquidation levels to predict potential resistance points.

Woo pointed out that the recent price fluctuations of Bitcoin align with Fibonacci levels and liquidation levels within 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 significant technical resistance level. This target is based on Fibonacci analysis of historical cycle highs and current cycle lows.

Bitcoin is still in its early stages but is expected to reach $500,000.

Matt Hougan, Chief Investment Officer of Bitwise, wrote in a report to clients on Tuesday: "This is no longer the first inning. But it is still too early for Bitcoin to reach $500,000."

Hougan stated that while a market pullback to a consolidation phase is expected, "it feels like $100,000 may be just around the corner."

He also believes that $500,000 per Bitcoin is the correct dividing line between early and late stages, as it signifies Bitcoin's true 'maturity' and compares it to gold.

Hougan explained: "Currently, the total market capitalization of gold and Bitcoin is about $20 trillion. If Bitcoin can capture half of that market share, then based on the current circulation, the price of each Bitcoin would reach $500,000." He further noted that the stance of central banks is a key factor driving Bitcoin's price increase.

Hougan believes that if central banks include Bitcoin in their reserve assets, it would significantly boost Bitcoin's price. He cited the "Bitcoin National Reserve" plan proposed by U.S. Senator Cynthia Lummis as an example, emphasizing the potential for this trend.

The report stated: "If central banks start to follow suit, the goal of Bitcoin reaching $500,000 will no longer be far off. However, considering that Bitcoin could drive growth in the entire value storage market, along with the reality of increasing debt and money printing by governments, Bitcoin's long-term price potential is far beyond that. Even reaching $1 million or higher is possible."