Bitcoin (BTC) price rose 3% on May 13 as cryptocurrency traders anticipated price volatility ahead of this week’s U.S. macroeconomic data update.
According to data from Cointelegraph Markets Pro and TradingView, the intraday BTC price hit a high of $63,269 on Coinbase shortly after Wall Street opened on May 13.
This week, market participants await U.S. inflation data that will help the Federal Reserve decide whether to cut interest rates in 2024.
The U.S. Producer Price Index (PPI) will be released on Tuesday, May 14th, and the Consumer Price Index (CPI) will be released on May 15th.
According to CME’s FedWatch tool, market analysts predicted a 72% chance that interest rates would remain the same at the July Federal Open Market Committee (FOMC) meeting, while the chance of a rate cut later this year was pushed to a 48.6% chance at the September meeting. Traders had forecast a 91.1% chance of interest rates remaining unchanged at the June meeting.
“Inflation data is center stage,” said popular analyst Tedtalksmacro on market dynamics this week.
“Expect volatility. “But this is the first time we see a potential slowdown in inflation data.”
The analyst explained that reducing inflation “would be good for risk assets like Bitcoin” and would push the market “a notch higher.”
Fellow analyst Seth shared the following chart in his May 12
The analyst acknowledged that “CPI, core CPI, PPI and the FED Chairman’s speech” this week are likely to influence BTC price direction.
“I think Jerome Powell is going to pump our bags. The U.S. economy is not as strong as the data suggests. The actual unemployment rate reported by the Ludwig Institute is 24.2% compared to 3.8% reported by US.Dep.Labor!”
If the Coinbase premium turns negative, the price of Bitcoin may rebound.
Bitcoin has experienced a prolonged downward trend since turning away from its all-time high of $73,835 on March 14. With the RSI trending lower, the price hit a series of highs and lows, reaching a nearly oversold state at 33 on May 1.
According to data from CryptoQuant, the Coinbase Premium Index mirrored BTC’s price action, falling from $0.08 to nearly zero over the same period.
The Coinbase Premium Index is an indicator that represents the percentage difference between the BTC/USDT pair on Binance and the BTC/USD pair on Coinbase Pro.
Analysts at CryptoQuant explain that the Coinbase Premium Index is an important “leading” indicator that can be used to predict the future of BTC price.
Historically, when this indicator turns negative and reverses from a downtrend to an uptrend, the BTC price has always bounced, as shown in the chart below.
At the time of publication, the Coinbase Premium Index is currently positive, but the analyst added that it is “close to zero.”
“If past patterns repeat, you may have a better chance of success if you wait a little longer and invest in the rebound after the trend turns negative.”
Crypto trader Mustache was optimistic, arguing that the current move would lead to a more sustained rally like in previous halving cycles.
In a May 13 post on
“It was always like that in the past. “The structure is the same, only the price is different.”
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.