The American inflation rate has been released! What was the reaction of the market and the whales?

The U.S. Labor Department's latest report on Tuesday showed that the country's consumer price index (CPI), the main measure of inflation, rose 0.1 percent in November, for a year-on-year increase of 3.1 percent.

Although the monthly rate showed a slight increase compared to the US CPI index in October, the annual rate showed a slight decrease from the 3.2 percent recorded in the previous month.

Following the publication of these data, the Santiment analytical team emphasized that it is likely that we will see fluctuations in the price of digital currencies in the short term. Meanwhile, according to Sentiment, there are many signs of a bear market.

At the time of writing, the price of Bitcoin (BTC) is back below the $41,000 level with a 2% drop and is trading in the $40,970 range. The selling pressure is quite visible and we may still see the price drop below $40,000.

Meanwhile, on-chain data published by Sentiment shows a significant trend. Bitcoin shows a mild return to exchanges, reflecting uncertainty among traders. In contrast, the increased presence of Tether (USDT) on exchanges, with an increase of 6.9% compared to six months ago, acts as a positive indicator for bullish sentiments in the market.

Meanwhile, prominent crypto market analyst Ali Martinez has identified a strong support zone for Bitcoin between $37,150 and $38,360 in the face of possible further corrections. This support is proven by the participation of 1.52 million addresses that have purchased a total of 534 thousand bitcoins. In addition, Martinez has reported on two resistance walls blocking Bitcoin's upward trend, at the $43,850 and $46,400 levels.

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Notably, following the recent decline in the price of Bitcoin, there has been a significant increase in the number of entities holding 1,000 Bitcoins or more. This bullish trend suggests that whales have taken the recent price drop as an opportunity to capitalize and are accumulating more cryptocurrency.

All eyes are on the Federal Reserve!

Market participants predict that policymakers will finally announce an end to their current tightening after raising interest rates 11 times since March 2022. While some market forecasts point to a pause in rate hikes, with a possible rate cut in the future, Federal Reserve analyst Jim Grant still sees rates staying high, with no cuts in the near term.

The next meeting of the Federal Open Market Committee (FOMC) is scheduled for December 13, 2023. According to the CME Fedwatch tool, there is a 98.4 percent chance that the Fed rate will remain unchanged and only a 1.6 percent chance of a hike.