More bullish crypto markets ahead of Wall Street open, but order books warn the ‘fading’ could turn upside down
Another multi-month high was set before Wall Street opened on Jan. 18 after U.S. macroeconomic data came in much lower than expected.
BTC/USD 1-Day Candlestick Chart (Bitstamp). Source: TradingView
US PPI figures fell sharply
Data from Cointelegraph Markets Pro and TradingView saw BTC/USD rise to $21,646 on Bitstamp.
A subsequent correction saw the pair close to $21,400 at the time of writing, with US stocks reacting to December economic activity data.
In particular, the producer price index (PPI) showed spending growth cooling faster than the consensus forecast, while retail sales also contracted more than estimates.
“PPI is 6.2%, expectations were 6.8%.” Core PPI is 5.5%, expectations were 5.7%,” tweeted Cointelegraph contributor Michael van de Pop.
“Retail sales -1.1%, while -0.8% was expected.” Core retail sales -1.1%, while -0.4% was expected. Big losses.”
Bitcoin was bullish on the numbers, likely reducing the need for more aggressive rate hikes from the Federal Reserve.
Earlier, the Bank of Japan, unlike the Fed and other major central banks, announced that it was unwilling to tighten its very loose monetary policy.
Thus, the already noted US dollar index (DXY) continued the correction initiated by the Japanese news, when it reached the PPI, which fell to 101.52, the lowest level since the end of May last year.
One day candlestick chart of US Dollar Index (DXY). Source: TradingView
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Analysis sees “fading momentum” on BTC chart
BTC/USD last traded in mid-September.
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As always, much nervousness was visible among traders despite the strong performance, with Analytical Resources Materials indicators repeating warnings of weakness to the upside.
“The same BTC chart is waking up to the game,” he wrote that day, referring to the status quo on Binance’s order book.
“The decrease in volume makes me think that the momentum is running out and some offers have been removed which is a concern. Looking to see if the liquidity of the bids replenishes and moves higher. If not, the 21-week moving average should hold. .”
BTC/USD Order Book Data (Binance). Source: Material Indicators/Twitter
Popular commentator Bloodgood was more optimistic, challenging others’ predictions of BTC/USD falling to $12,000 in 2023.
Analyzing the longer-term picture, he argued that the two-year low seen in the fourth quarter represented a “failed failure”.
“Breakdowns usually lead to strong pullbacks,” he added in the accompanying chart, which has a key support zone around $19,000.
“$12,000000000000000000000000 as long as it stays above the blue line”
BTC/USD ticked chart. Source: Bloodgood/Twitter
A snapshot of long and short positions by Filbfilb, co-founder of trading firm Decentrader, was similarly encouraging.
“The liquidity picture is now very different for BTCUSD. “More bears are sweating than bulls right now,” he wrote on Twitter.
The views, thoughts and opinions expressed herein are solely those of the authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.