- Coinbase predicts positive market development, warns of impact of US CPI.
- QCP Capital supported the bullish outlook for BTC.
Cryptocurrency Market Could Expand, Coinbase Analysts Say its short-term recovery from a massive sell-off scenario following Bitcoin’s (BTC) drop to $49,000 on August 5.
According to the weekly analyst commentary, the drop eliminated long positions, allowing for “cleaner positioning” that could boost the market.
“A cleaner positioning could be a positive technical indicator for crypto, in our view… This could indicate that the market may be done with pessimism.”
At press time, trader sentiment in the futures market has turned positive, as indicated by positive funding rates. This also coincided with BTC’s rebound from $49,000 to the previous lows in the $60,000 range.
Source: CryptoQuant
QCP Capital analysts reiterated the same optimistic outlook in their weekend report. Short.
“The BTC uptrend is significant and structural. Throughout the week (and despite the crazy volatility), there has been consistent demand for BTC call options expiring in 2025 with strike prices closer to 100,000.”
Will US CPI data determine BTC’s next direction?
While Coinbase analysts acknowledged that the short-term price action for BTC, Ethereum (ETH), and Solana (SOL) could continue.
But macroeconomic factors will determine investors’ next move. They cited U.S. CPI (consumer price index) data, due out on Aug. 14, as a key factor to watch.
“We expect this selling pressure to ease… We believe macroeconomic dominance could persist. For example, next week’s inflation number on August 14 will likely be subject to closer scrutiny given this week’s events.”
However, Coinbase added that traders and investors could start positioning themselves accordingly by using the PPI (producer price index) data to gauge possible CPI outcomes. The PPI data tracks inflation from the producers’ perspective.
The CPI, meanwhile, measures inflation by tracking consumer spending on essential goods and services. The Fed uses both sets of data to make its interest rate decisions. The PPI data will be released on August 13.
“But we also expect many market participants to look at the PPI the day before to provide an early indication of the direction of the CPI, which could also affect market performance.”
In short, a new wave of market volatility is expected starting August 13th, determining the next BTC and market direction for the week.
Over the weekend, BTC traded above $60,000 while ETH traded above $2,500. On the other hand, SOL traded above $150.
