Bitcoin ( BTC ) edged closer to the elusive $90,000 mark after US inflation data revealed a decline, with the November Consumer Price Index (CPI) at 2.7% year-over-year, against expectations of 3.1%. This softer number lessens pressure on inflation targets and rekindles interest in risk assets across markets.
Key Takeaways:
- The CPI report’s lower figure prompted a favorable response from Bitcoin, resulting in new positions being opened, rather than just covering existing shorts.
- On-chain data indicates a phase of balance-sheet repair and loss mitigation for Bitcoin, not capitulation.
CPI Drives BTC Price as Rebuilding Positioning Near $90,000
According to trader Back, Bitcoin’s surge post-CPI is supported by an increase in open interest, signaling new positioning instead of a mere squeeze of short sellers. The balancing of options gamma exposure around the spot price suggests that it is less confined and can respond effectively if liquidity increases.
Bitcoin analysis by Back. Source: X
However, this increase is still interpreted as a short-term move rather than a long-term trend shift. The early upward momentum seems to be driven by liquidity factors, leaving the door open for potential pullbacks as traders reassess positions post-initial reaction.
The remaining macroeconomic event for the year will be the Bank of Japan’s (BOJ) interest rate decision this Friday. While shifts in BOJ policy can influence global liquidity, recent price movements indicate much of this risk may have already been factored into Bitcoin’s behavior in recent sessions. A non-disruptive outcome could eliminate one of the last barriers to BTC’s near-term recovery.
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Bitcoin On-chain Data Suggests Stabilization Rather Than Distribution
Data from CryptoQuant indicates that Bitcoin has entered a phase of balance-sheet recovery since October. Metrics such as the net unrealized profit/loss (NUPL) show that unrealized losses have stabilized, while the spent-output profit ratio (SOPR) indicates selling is happening close to breakeven.
Bitcoin loss absorption phase. Source: CryptoQuant
Deposits on major exchanges tend to spike during brief downturns but diminish as prices stabilize, reinforcing the notion that selling pressure is reactive rather than persistent. Meanwhile, there are still significant inflows from active addresses, indicating that trading is occurring within a range rather than speculative dynamics.
The new inflation data could lead to more favorable conditions if dollar pressures lessen and real yields decline in the coming days, paving the way for Bitcoin’s stability to evolve into a more sustained uptrend, particularly if it reclaims the $90,000 level.
Bitcoin four-hour chart. Source: Cointelegraph/TradingView
For Bitcoin to demonstrate buyer confidence, it must surpass the $90,000 threshold and maintain a position above the monthly volume-weighted average price (VWAP). A daily close above this level would be crucial, with immediate selling pressure identified between the fair value gap (FVG) of $90,500 and $92,000.
A setback could trigger a re-test of the $83,800 swing lows.
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Disclaimer: This article does not contain investment advice or recommendations. Investing and trading come with risks, and readers should conduct their own due diligence before making decisions. Cointelegraph strives for accuracy and comprehensiveness but does not guarantee the information’s reliability. This article may contain forward-looking statements subject to risks and uncertainties.
