Bitcoin has been consolidating close to its year-high, leaving traders wondering if it will continue this pattern before another leg higher or if sellers will put pressure ahead of the US inflation report to be released tomorrow.
The US economic data has a huge impact on the digital asset’s performance, as it directly influences the Federal Reserve’s monetary policy decisions. The June US CPI report is expected to show that the annual inflation in the United States has dropped to 3.1% from 4%. A lower-than-expected figure would mean that the Fed is less likely to raise rates, which would result in a weaker US dollar.
Bitcoin could then break out of the horizontal resistance at $32k, forming a possible pennant formation. If the breakout is successful, Bitcoin could rise up to $37k, a distance equal to the one prior to the pennant’s formation.
It is clear that the disinflationary process in the US is set to continue, and if the US dollar takes a hit, Bitcoin could see a surge. All eyes will be on the US inflation report and the response of the US dollar.
