Bitcoin could enjoy extended gains as US consumer prices rise 7.5%, fastest pace since 1982 – FXStreet

Ekta Mourya Ekta Mourya
FXStreet

Bitcoin holders consider the asset a hedge against inflation, keeping an eye on the Federal Reserve’s response to rising inflation. The increase in US consumer prices is the fastest since 1982, fueling concerns at the Federal Reserve. 
US consumer prices soared 7.5%, growing at the fastest pace in 40 years. The spike increased pressure on the Federal Reserve to tighten policy. 
The Federal Reserve’s response to economic conditions could impact investor sentiment toward Bitcoin and crypto. Though the core Consumer Price Index (CPI) noted a 0.6% increase, the same pace as December 2021, there was a material increase in inflation. 
With a limited supply, investors consider Bitcoin a hedge against inflation. Inflation has acted as a driver for extended gains in Bitcoin, as investors flock to BTC during times of uncertainty. 
Analysts expect the Federal Reserve to aggressively raise interest rates, higher than previous forecasts. In a recent meeting, the Federal Reserve hinted at interest rate hikes starting in March 2022. 
Proponents believe the recovery in the cryptocurrency market and Bitcoin price over the past two weeks was fueled by the Federal Reserve’s response to rising inflation. Though the idea that Bitcoin acts as a hedge against inflation is criticized for being theoretical, Scott Bauer, CEO of Prosper Trading Academy, believes that it could have partially contributed to the BTC price rally. 
@FeraSY1, a crypto analyst and trader, believes if Bitcoin price sustains above $38,758, $49,000 could be the next target. The analyst noted a bearish divergence on the 4-hour candle, looking for an Inverse Head-and-Shoulders formation, predicting a subsequent rise after a bearish trend. 
#bitcoin
I don't like the combination of last few 4H candles, alongside with bearish div. on 4h

I will be looking for iH&S formation, with a strong condition that #BTC should NOT close any 4H candle below 38758$

if the iH&S got validated, 49K zone will be the target$btc https://t.co/2f20q2kzvW pic.twitter.com/pDMw1YCPj9
FXStreet analysts have predicted that Bitcoin price could stumble while the asset targets $50,000. 
 

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XRP price could be headed lower as sentiment fails to shift bullish, putting Ripple at risk of a 10% fall toward $0.70. The prevailing chart pattern suggests that the cross-border remittance token could continue to consolidate. 
Bitcoin price dropped below a critical Ichimoku level on Thursday and extended the drop throughout Friday and Saturday. However, this pullback is probably due to a return to equilibrium within the Ichimoku Kinko Hyo system.
MATIC price has been on a downtrend since December 27, 2021, and has shown no signs of a reversal so far. The recent uptrend, albeit promising for a while, failed to set up a higher high.
Bitcoin price is at an inflection point of its recent uptrend and is likely to reverse and establish a directional bias. If BTC sets a higher low, there is a good chance the rally will continue; else, investors can expect a steep correction.
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