Bitcoin Struggles amid Rising Fluctuations and Economic Data Releases
Summary:
Bitcoin's values face the risk of diminishing early-week profits on May 14 due to heightened fluctuations ahead of key economic data releases. The cryptocurrency saw a minor dip despite reaching a high the day prior, as the bulls struggled to maintain momentum. Data such as the Producer Price Index (PPI) and remarks from the Federal Reserve Chair, Jerome Powell, are expected to influence Bitcoin's performance. Furthermore, a unique scenario has emerged where PPI will be unveiled a day before the Consumer Price Index (CPI), which could lead to stronger market reactions. Lastly, probabilities of an interest rate cut by the Federal Reserve heavily rely on significant surprising elements.
Bitcoin's early-week gains were put at risk on May 14 due to escalating fluctuations ahead of major economic data reports. The price of Bitcoin experienced a minor drop to $61,440 on Bitstamp on an hourly basis, despite reaching a high of $63,450 the preceding day, a point where short-sellers were under threat. According to trading analytics tool Material Indicators' observation made on X (previously Twitter), a countervailing force on over-leveraged short-sellers would ensue if Bitcoin surpassed the $63k mark.
Nevertheless, bulls have struggled to find traction, and a considerable amount of liquidity has shifted to the lower end of the scale, as per CoinGlass data. Material Indicators also observed that bid prices at both $60,000 and $65,000 were gathering steam in the face of US economic updates. Set to arrive were the Producer Price Index (PPI) figures for the day and remarks from Federal Reserve Chair, Jerome Powell.
Temporary buffers in the order book in anticipation of Federal Reserve speeches and key economic reports are not unusual, as well as their cancellation at the last moment. Interestingly, Bitcoin has handled liquidity swings above and below the spot price without breaking its tight range since last month, as reported by Cointelegraph.
Analyst and financial commentator Tedtalksmacro has shed light on the potential influence of the PPI data, revealing an unorthodox situation. He observed that this time the PPI would be released a day before the Consumer Price Index (CPI) for April, which is a rare event for traders, setting aside the unpredictability of the data's accuracy. A notably stronger market reaction to any unexpected results was anticipated due to the close link between the PPI and CPI data.
Furthermore, data from the CME Group's FedWatch Tool indicates that any alteration to market expectations about an interest rate cut from the Federal Reserve would require substantial surprise elements. The likelihood of a 25-basis-point rate cut at the Federal Open Market Committee's upcoming June meeting sits at a meagre 3.5%, with the odds increasing to 24.6% for the July meeting.
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Published At
5/14/2024 10:52:12 AM
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