Bitcoin (BTC) moved higher on August 18 as the latest data confirmed the highest inflation on record in the European Union.
BTC spot price support and resistance approach
Data from Cointelegraph Markets Pro and TradingView show that the BTC/USD pair rose above $23,500 at the time of writing, having preserved $23,000 as support overnight.
Concerns about a deeper decline in risk assets were widespread throughout the week, with bitcoin and Ether (ETH) in particular unable to clear long-term resistance levels.
With the bulls appearing on the roll, the mood among analysts was understandably wary.
“BTC has broken away from this huge bullish channel that everyone seems to be watching,” wrote Crypto Trades’ Daan as part of his latest update on Twitter.
“The $23,800-24,000 range will be resistance. A break back and it would be a great bearish trap. One bearish rejection and we’re going down.”
Meanwhile there is short-term support in the form of buying whales at $22,800 and a higher on-chain tracking platform, Whalemap argued.
Now just below bitcoin’s 200-week moving average, the $22,800 area should be the limit to watch for a market pullback.
“Back to square one”, abstract the Whalemap team next to a graph showing the amount of whale assets held by the price point.
“Whale accumulation at $23,400-22,800 is still the closest support we have for bitcoin (if we start to fall).
Inflation breaks records
The macro triggers were clearly pointing towards inflation on the day, as a result of the release of the 9.8% EU rate in July.
Also read: Bitcoin miners hold 27% less BTC after three months of strong sales
The July figure represents the highest inflation rate ever recorded in the European Union, up from 9.6% year-on-year in June. For comparison, in July 2021, inflation was 2.5%.
“The lowest annual rates were recorded in France, Malta (6.8% each) and Finland (8.0%). The highest annual rates were recorded in Estonia (23.2%), Latvia (21.3%) and Lithuania (20.9%),” says the Eurostat report.
“Compared to June, the annual inflation rate fell in six Member States, remained stable in three and rose in eighteen”.
In an interview with Reuters on August 18, Isabel Schnabel, a member of the executive board of the European Central Bank (ECB), could not say with certainty that inflation had peaked.
“I wouldn’t rule out that inflation could rise more in the short term,” she said.
“However, any projection is currently subject to high uncertainty. It is therefore very difficult to predict when inflation will peak”.
The EU figures came a day after the UK recorded its first double-digit inflation readings since the early 1980s.
This month, price growth in the United States appeared to be slow. The next inflation index is expected on 13 September.
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