Bitcoin (BTC) turned higher on August 18 as the latest data confirmed the highest inflation rate in the European Union ever.
BTC/USD 1-hour candlestick chart (Bitstamp). Source: TradingView
Support and Resistance Approaching BTC Spot
Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD crossed $23,500 at the time of writing, after maintaining $23,000 as support overnight.
Concerns about a deeper pullback in risk assets were widespread throughout the week, as Bitcoin and Ether (ETH) in particular were unable to breach long-term resistance levels.
With the bulls seemingly in a vulnerable position, the mood among analysts was naturally cautious.
“BTC has broken off this huge bullish channel/wedge that everyone seems to be watching,” wrote analyst Daan Crypto Trades pseudonymously in part of the latest Twitter update. they added:
23.8 – 24 A will act as resistance. Break again and this will be a great bear trap. My bearish rejection as we head down.”
Meanwhile, near-term support has come in the form of whale purchases worth $22,800 and up, according to on-chain monitoring resource Whalemap.
Now just below Bitcoin’s 200-week moving average, the $22,800 area should be the line in the sand to watch in the event of a market pullback.
“Back to square one,” the Whalemap team summarized along with a graph showing the range of whale coins grouped by price point, adding:
“The $23,400-$22,800 whale backlog remains our closest support to Bitcoin (if it starts to fall).
An infographic diagram of a bitcoin whale wallet. Source: Whalemap / Twitter
Inflation beats records
It’s clear that macro stimuli were skewed on inflation today, with the July data from the European Union topping out at 9.8%.
Related: Bitcoin miners consume 27% less BTC after 3 months of big sale
The July numbers marked the highest inflation reading ever in the bloc, rising from 9.6% year-on-year in June. For context, in July 2021, inflation was 2.5%.
The lowest annual rates were recorded in France, Malta (6.8%) and Finland (8.0%). The highest annual rates were recorded in Estonia (23.2%), Latvia (21.3%) and Lithuania (20.9%),” said a report from Eurostat, adding:
Compared to June, annual inflation declined in six member states, remained stable in three, and rose in eighteen.
In an interview with Reuters on August 18, Isabelle Schnabel, a member of the European Central Bank (ECB) Executive Board, could not say with confidence that inflation had peaked.
“I would not rule out that inflation will increase in the short term,” she said, adding:
But any forecasts are currently subject to a high degree of uncertainty. So it is very difficult to predict when inflation will peak.”
The EU figures came a day after the UK posted its first double-digit inflation readings since the early 1980s.
This month, price growth in the US appears to be slowing, with the next inflation reading due on September 13.
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