Bitcoin price showed a quick reaction to the decline in US inflation data, remaining in a narrow range.
Bitcoin Price Reaction to Inflation Data
Bitcoin quickly responded to the Producer Price Index data, which fell to 2.6% in August, well below the expected 3.3%. At the time of writing, Bitcoin was trading at approximately $113,900, rising from an intraday low of $110,700.
Network Strength and Market Comparisons
Bitcoin's network parameters continue to strengthen despite the sideways price movement. Analysts note that mining difficulty has reached record levels, indicating a high level of miner participation. Comparing the Bitcoin-to-gold ratio and US stock market capitalization suggests that Bitcoin may be at a global peak. These factors highlight that while the network strengthens, Bitcoin's price faces external pressures.
Global Money Supply and Potential Bitcoin Price Movements
Several analysts point to a sharp increase in global M2 money supply, which may create conditions for significant Bitcoin price movements. Rising liquidity across the global market will support risk assets, including Bitcoin. If the price breaks above $114,100, the next key level will be $118,000. However, if the price fails to hold above $113,000, a return to the lower end of the range near $111,000 may occur.
Amid rising money supply and record mining difficulty, Bitcoin approaches a significant inflection point. The market awaits which side will prevail.
