Much uncertainty remains about the future of Bitcoin’s price amid new signs that US inflation is slowing.

Bitcoin
BTC

to mark
$16,785

rose to $17,000 at the opening on Wall Street on November 15, as new US economic data showed continued inflation cooling.

BTC/USD 1-hour candlestick (bit stamp). Source: TradingView
The “good” PPI increases risky assets
Data from Cointelegraph Markets Pro and TradingView tracked BTC/USD as it hit multi-day highs.

Volatility receded an hour before the open as the US Producer Price Index (PPI) came in below expectations.

The core PPI was unchanged month-on-month, with the total PPI increasing 0.2% vs. the forecast of 0.4%. The year-over-year PPI was 8% vs. 8.3% expected.

The data, already in sharp contrast to last month’s PPI, follows last week’s October Consumer Price Index (CPI) reading, also showing that price increases in the United States are slowing down.

A seemingly good sign for crypto along with risk assets, the lower numbers theoretically increase the probability of an earlier turn in the Fed’s aggressive economic policy.

“Good CPI and good PPI,” responds Michael van de Poppe, founder and CEO of trading company Eight.

Others were more suspicious of the results in light of such aggressive quantitative adjustment (QT) measures.

“PPI is the inflation number the Fed uses to make decisions,” popular analyst Venturefounder wrote in part of a Twitter analysis.

“The market is bouncing back on the news, inflation may have peaked, but I think the most alarming part is that after a record QT for almost a year, the PPI is still at 8%.”

US producer price index (PPI) chart. Source: Bureau of Labor Statistics
Stocks naturally appreciated the latest economic changes, with the S&P 500 and Nasdaq Composite Index up 1.7% and 2.4%, respectively, at the open.

Meanwhile, the already precarious US Dollar Index (DXY) felt the pressure, briefly below 105.5 at its lowest levels since mid-August.

1-day candlestick chart of the US Dollar Index (DXY). Source: TradingView
Bullish divergences meet “Final Capitulation” risk
For Bitcoin, optimism was still hard to find in analytical circles.

Related: Edward Snowden Says He Feels ‘Like to Shrink’ $16.5K Bitcoin

However, for trader and analyst Seth, a new bullish divergence in the weekly chart was something to feel confident about.

“Bears have credit for the FTX Blackswan. Not many knew that the second largest exchange was bankrupt! accompanying the declared Twitter comments.

More somber news came from analyst Matthew Hyland, whose earlier warning of a bearish crossover on the chart proved correct.

“The previous two crossovers resulted in moves of -46% and -57% AFTER the crossover was confirmed,” he reiterated on the three-day chart moving average convergence divergence (MACD) indicator.

BTC/USD annotated chart. Source: Matthew Hyland/Twitter
Meanwhile, Crypto’s Il Capo, still looking at a deeper macro low, added that “final capitulation is possible.”

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.

Source: CoinTelegraph

LEAVE A REPLY