As a seasoned crypto investor with a few years under my belt, I’ve learned to keep a keen eye on macroeconomic data and the reactions they elicit from Bitcoin (BTC) markets. The volatility we experienced on May 14 was a stark reminder of this fact.
On May 14, Bitcoin (BTC) showed signs of relinquishing its early-week price advances as market volatility heightened in anticipation of key macroeconomic data releases.
BTC price “barts” up and down into PPI, Powell
As a crypto investor, I closely monitor the market trends using tools like CryptoMoon Markets Pro and TradingView. Recently, I noticed some signs of BTC price weakness emerging on the hourly timeframes. Consequently, the Bitcoin price dipped down to $61,440 on Bitstamp.
BTC/USD had managed as high as $63,450 the day prior — a level at which shorts faced clear danger.
As a crypto investor, I closely monitor market analysis from trusted resources, and Material Indicators recently cautioned that if Bitcoin manages to surpass $63k, it could lead to a squeeze for overleveraged short positions.
As a researcher observing the market trends, I’ve noticed that the bullish momentum has not materialized as anticipated. At this moment, significant amounts of liquidity are being withdrawn in a bearish direction based on current data from CoinGlass.
Looking at the bigger picture, Material Indicators observed an increase in bids at the prices of $60,000 and $65,000 prior to the upcoming economic reports from the US.
On that day, we’ll see the release of the Producer Price Index (PPI) data, followed by insights from Jerome Powell, the Chairman of the Federal Reserve.
“You might frequently observe ‘safeguards’ being set in the order book prior to Federal Reserve speeches and economic reports.”
“It’s also not uncommon to see them get pulled at the last minute.”
As a crypto investor following CryptoMoon’s reports, I’ve noticed that Bitcoin has been consistently absorbing liquidity around both higher and lower prices while staying within a tight price band since the end of last month.
Analyst: Expect “more significant” reactions to macro data
Financial commentator Tedtalksmacro disclosed an unconventional approach when discussing the significant implications of the latest PPI figures this week.
As a researcher, I’ve observed that the Producer Price Index (PPI) is scheduled to be released prior to the Consumer Price Index (CPI) data for April. This sequence of events is uncommon among economic indicators, and it may create an intriguing situation for traders. However, it’s essential to remember that unexpected deviations in either index can still significantly impact market reactions.
“Today is unusual because the US Producer Price Index (PPI) data will be made public a day before the Consumer Price Index (CPI) information becomes available,” he shared with his X audience.
“PPI + CPI data have a very strong correlation. PPI leading the way for CPI numbers historically. Thus expect the market to react more significantly than usual on any miss on expectations.”
The data obtained from CME Group’s FedWatch Tool emphasizes that significant unexpected events are required to alter the belief that the Federal Reserve will not consider implementing an interest rate reduction before September.
As a researcher, I’ve analyzed the probabilities for interest rate cuts at the upcoming Federal Open Market Committee (FOMC) meetings. At the time of my analysis, the chance of a 0.25 percentage point reduction during the June meeting was only 3.5%. Conversely, the likelihood for such a cut in July was significantly higher at 24.6%.
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2024-05-14 11:02