Bitcoin price held steady on January 21, rising by over 1.45% after Donald Trump delivered his speech at the World Economic Forum in Davos. Still, technical analysis suggests that BTC may crash by 10% to its November low of $80,485. This decline may happen ahead of the upcoming US inflation and GDP reports.
Bitcoin Price at Risk Ahead of US Inflation and GDP Data
Bitcoin price has crashed and is in a technical bear market after falling by nearly 30% from its highest level on record. It stabilized on Wednesday after Donald Trump called for a peaceful resolution to the Greenland issue in his speech at the World Economic Forum in Davos.
The next important catalyst for Bitcoin will be the upcoming US GDP and inflation data, which will come out on Thursday this week.
Economists polled by Reuters expect the upcoming report to show that the economy expanded by 4.3% in the third quarter after growing by 3.8% in the second quarter. This report will come out this month because of the government shutdown.
Economists also expect that the US economy grew by 5% in the fourth quarter, a move that will bring the annual growth rate to over 2%.
The US will also publish the latest Personal Consumption Expenditure (PCE) report on Thursday. This is an important report, which measures the country’s inflation rate in the urban and rural areas and is the Federal Reserve’s favorite inflation gauge.
Economists expect the report to show that the headline PCE slowed to 2.7% in October from the previous 2.8%. Core inflation, which excludes the volatile food and energy prices, is expected to remain at 2.8%.
While this report is important, it will likely have a mild impact on Bitcoin and other assets because it is a lagging one. Also, the inflation report will not change the Federal Reserve’s outlook for interest rates this year. Economists expect the bank to deliver several interest rate cuts this year if inflation continues falling.
Bitcoin price also wavered as investors reacted to the latest Bitcoin ETF inflows and outflows data. The funds had an outflow of $483 million on Tuesday after shedding $395 million on Friday.
BTC Price Technical Analysis Points to a Plunge
The daily timeframe chart shows that the BTC price has come under pressure in the past few weeks, moving from a high of $97,790 to the current $89,950.
It has moved below the Supertrend indicator, a sign that the bearish trend will accelerate in the near term. It moved below the lower side of the ascending trendline, which is part of the ascending triangle pattern.
Bitcoin price remains below the 50-day and 100-day Exponential Moving Averages (EMA). Therefore, the most likely BTC price forecast is bearish, with the next key target being at $80,486, which is about 10% below the current level.
This view mirrors that of Michael Novogratz, the billionaire founder of Galaxy, who warned that a clear Bitcoin recovery will be confirmed if it moves above $100,000 and $103,000.
On the other hand, a move above the key resistance level at $94,392 will invalidate the bearish Bitcoin price outlook and point to more gains.