Bitcoin and Gold Poised for Recovery Ahead of Crucial Inflation Data

Bitcoin (BTC) has maintained its resilience above $79,000 as the broader cryptocurrency market consolidates gains. Meanwhile, gold (XAU) is steady at around $4,400, driven by a shift towards risk-on sentiment among investors.

The upcoming US economic data release could have significant implications for both Bitcoin and gold. The August Consumer Price Index (CPI) figures are expected on Friday, which will provide crucial insights into inflation levels. A hotter-than-expected CPI would suggest persistent inflation, increasing the likelihood of a Federal Reserve interest rate hike or prolonged higher rates.

According to the CME's FedWatch tool, there is a 62% chance that the Federal Reserve will raise interest rates in the 3.75%-4.00% range on September 16. However, immediate focus has shifted to the US Bureau of Labor Statistics' CPI release.

Technical analysis suggests that Bitcoin and gold are poised for recovery. The 50-day EMA near $72,572, the 200-day EMA around $72,824, and the 100-day EMA at $70,592 all sit comfortably below spot prices, indicating a firmly supportive underlying trend.

Yusuf Fakhro, Partner at ARP Digital, warned that a hike into the September meeting would test this rally directly. He noted that Kevin Warsh's hawkish Jackson Hole turn pushed the odds of a September hike to roughly two-thirds.