Bitcoin exceeds $22,000 – tomorrow will be a big day

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Bitcoin has risen steadily in recent days and was also able to break above the $22,000 psychological mark. Weekly profits amount to more than 10%, but not all investors are happy about it.

More than 45,000 traders had bet on falling prices, costing them almost $177 million.

The cryptocurrency market has finally managed to reach a total market capitalization of over $1 trillion again, but the momentum is likely to stop in the coming hours.

Increasingly investors are turning their attention to tomorrow’s release of US inflation data . If these deviate from forecasts, the market expectation of the next Fed rate hike will change.

For riskier assets such as cryptocurrencies, higher-than-expected inflation data would be primarily problematic. The market would expect the Fed to raise rates further as the term of their hike lengthens. This is likely to drain more liquidity from the market, weighing down bitcoin, Ethereum and co.

However, the market remains of the view that the Fed will slow the pace of rate hikes, as City Index Ltd Chief Analyst Tony Sycamore explained:.

“The market has realized that it has a reprieve from the Fed’s unrelenting and aggressive monetary policy for a few weeks. And that the pace of central bank rate hikes is likely to slow.”

Tomorrow’s inflation data may reinforce this view and support the market, or it may become a drag.

Bitcoin Technical Price Levels

Currently, the BTC/USD daily gain is 3.7% at a price of $22,358. The strong rally on 9th Sep reached the 50% Fibo retracement but was still unable to break above it on a daily close basis.

This was only achieved the next day, so the 38.2 percent Fibo retracement of $22,311 was the target. If the bulls manage to break above it on the daily close, the next target will be the 23.6% Fibo resistance at $23.417.

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If the bears prevent an extension of the upside move, the 50 percent Fibo of $21.417 offers immediate support. Below that is the 61.8% Fibo retracement at $20,523.

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