Key Points
- Bitcoin experienced a sudden volatility, bottoming near $61,000 as U.S. inflation data was released.
- The Producer Price Index (PPI) saw a third consecutive monthly increase, aligning with market expectations.
Bitcoin’s value experienced a sudden shift, dropping to around $61,000 on May 14. This fluctuation coincided with the release of inflation data from the United States.
U.S. PPI and Market Conditions
The Producer Price Index (PPI) for April was in line with market predictions, recording a 2.2% increase. This marks the third consecutive month of growth for the PPI.
According to an official statement from the U.S. Bureau of Labor Statistics, “For the 12 months ended in April, prices for final demand less foods, energy, and trade services increased 3.1 percent, the largest advance since climbing 3.4 percent for the 12 months ended April 2023.”
The crypto market managed to dodge the implications of a significant PPI miss. However, the overall picture remains disadvantageous for risk assets.
Federal Reserve and Market Predictions
The Kobeissi Letter, a trading resource, noted that “PPI inflation is now up for 3 straight months for the first time since April 2022. Yet another sign the Fed can’t cut rates.”
This refers to ongoing speculation regarding how the Federal Reserve might handle lowering interest rates. Fed Chair Jerome Powell was scheduled to contribute to the market indicators during a speech at 10 AM Eastern time.
Trading firm QCP Capital mentioned in its latest update that the May 15 Consumer Price Index (CPI) print “may be the catalyst to finally help the market pick a direction.”
Bitcoin’s Position
Among Bitcoin traders, uncertainty prevails as the price continues to fluctuate within a certain range.
Significant blocks of liquidity were returning to the order book, surrounding the spot price prior to the macro data release and Powell’s speech.
According to popular trader Jelle, three conditions for Bitcoin’s upside have now been met. These include retesting the 100-day exponential moving average, currently at $60,409, as support. The moving average convergence/ divergence (MACD) indicator also appears bullish on daily timeframes.
Jelle stated that $65,000 is the threshold for a bullish scenario to unfold.
