Bitcoin Value Rises by 3% in Light of Upcoming U.S Economic Data Release
Summary:
Bitcoin's value increased by 3% on May 13, due to crypto investor speculations about price volatility ahead of the U.S. macroeconomic data update. Market participants are awaiting the United States inflation data which could determine whether the Federal Reserve will lower interest rates in 2024. Analysts predict a slowdown of inflation data, which could be beneficial for risk assets such as Bitcoin. A negative trend and reversal in the Coinbase Premium Index could lead to a Bitcoin price rebound, potentially resulting in a more sustained upward trend, similar to previous post-halving cycles.
The value of Bitcoin (BTC) saw a 3% increase on the 13th of May, prompting speculations among crypto investors about a surge in price volatility ahead of the upcoming update on U.S. macroeconomic data. Coinbase recorded an intraday BTC price peak of $63,269 shortly after the commencement of trading on Wall Street on May 13, according to data sourced from Cointelegraph Markets Pro and TradingView.
Traders are on the look out for this week’s inflation data from the United States, expecting it will influence the decision of the Federal Reserve on whether or not to cut down interest rates in 2024. This week, anticipation is high for the release of the U.S. Producer Price Index (PPI) on Tuesday, May 14 and the Consumer Price Index (CPI) slated for May 15. The FedWatch tool from CME has relayed projections from market analysts indicating a 72% chance that rates will remain the same at the July Federal Open Market Committee (FOMC) meeting, while the possibility of cutting rates has been pushed towards the year end, with a 48.6% likelihood for the September meeting. As for the meeting in June, a 91.1% chance has been predicted that the rates will be unchanged.
Popular market analyst, Tedtalksmacro, has stated that the primary market focus this week is the inflation data. He warns that the market can expect some volatility but also highlights that this might be the first instance in a while that a slowing down of inflation data may be seen. He has further added that declining inflation could be beneficial for assets that carry risks, such as Bitcoin, and that the market might be on the brink of an upward journey.
Another analyst, Seth, produced a chart on May 12 on X illustrating that the relative strength index (RSI) had risen above a downward trendline on a day-to-day timeframe. He acknowledged that this week’s “CPI, Core CPI, PPI and FED chair speech” would undoubtedly impact Bitcoin's pricing direction. In the meantime, the downtrend of Bitcoin has persisted since it diverted from its highest ever recorded price of $73,835 on March 14. From this point onwards, Bitcoin's price has noted a series of lower highs and lower lows causing the RSI to trend downwards until reaching near-oversold conditions at 33 on May 1.
Data from CryptoQuant reveals that the Coinbase Premium Index has reflected BTC’s price variation, falling from $0.08 to nearly zero in the same period. The Coinbase Premium Index symbolizes the percentage difference between the BTC/USDT pair on Binance and the BTC/USD pair on Coinbase Pro. A CryptoQuant analyst highlighted the Coinbase Premium Index as an essential 'leading' indicator capable of predicting BTC's pricing future. In past scenarios, a negative turn and an upward reversal in this indicator has consistently resulted in a BTC price rebound. However, as of the time of publishing, the analyst confirmed that the Coinbase Premium Index was nearly at zero, but remained positive.
Crypto trader Moustache, expressed optimism, asserting that the current market activity is likely to result in a more sustained upswing, similar to previous post-halving cycles. He conveyed in a May 13 post on X that “weak hands need to get out of the market first before $BTC will rise towards $80,000'' and that this has historically been the pattern, with only the price itself differing. This news doesn't suggest investment advice or recommendations. Every trading and investment action comes with risk, readers should therefore conduct their own investigations before taking a decision.
Published At
5/14/2024 12:07:08 AM
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