Bitcoin investors pull back after CPI report: What's next for BTC?

The price of Bitcoin (BTC) consolidated around the $29,500 support level after the August 10 CPI report showed a slight inflation increase of 0.2 percent. The on-chain analysis explores whether crypto traders will HODL for a $32,000 retest in the coming days or book profits.
On August 10, the US Bureau of Labor and Statistics released its CPI report for July 2023, showing a slight increase in inflation. Although the inflation report met market expectations, initial investor reactions saw the BTC price drop slightly towards $29,300.
On-chain data shows that Bitcoin bulls are making an effort behind the scenes to trigger an early price recovery.
Bitcoin investors moved around 6,000 BTC after the CPI report!
According to on-chain data, Bitcoin investors responded to the August 10 CPI report by moving 5,949 BTC worth about $175 million from exchanges. CryptoQuant's Exchange Reserves chart below reveals that this brought total withdrawals in August to 19,837 BTC, worth $585 million.
Exchange reserves track real-time changes in the total Bitcoin balances that investors deposit on crypto exchanges globally. The continued decline in stock market reserves means investors are turning to HODL for future earnings rather than looking for short-term selling opportunities.
This indicates that although the CPI report triggered a weak price pullback, the bulls are making moves to reverse the scenario in the coming days.
The bulls are making an effort to prevent the price drop!
Bull Bitcoin investors have placed more buy orders, confirming their positive outlook to prevent a prolonged decline in BTC prices. The Exchange In-Chain Depth of Market chart shows the volume of active buy/sell orders placed by crypto traders on various exchanges.
Currently, the bulls have prepared active orders to buy 24,000 Bitcoins at current prices. This figure significantly outweighs the 22,700 million active BTC sell orders from traders looking to exit.
When active buy orders of an asset exceed the market supply, it indicates that that asset may be on the verge of a price rebound. Currently, Bitcoin sell orders have exceeded the market supply by 1,300 BTC.
If the momentum turns bullish as predicted, buyers may gradually increase their bid prices in the race to fill their orders quickly. In summary, the decline in Stock Exchange reserves highlighted above and increased market demand may combine to trigger a recovery in BTC prices.
Bitcoin price prediction: $31,000 may be next!
In/Out of Money (IOMAP) data shows the current distribution of entry prices for BTC holders to identify key support and resistance levels. These data suggest that the $30,200 zone is the critical selling wall that could prevent BTC from reaching the $31,000 price target.
As shown below, 2.49 million addresses purchased 1.08 million coins at an average price of $30,268. If they close their positions, they could trigger a pullback. However, if Bitcoin investors continue to remove coins from exchanges as highlighted earlier, the supply squeeze will likely push BTC towards the $31,000 target.
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