Bitcoin (BTC) hit a major regional low on November 15 as bulls traded all-time highs for a retest of support.
BTC/USD 1-hour chart. Source: TradingView
Bitcoin cools as US PPI sparks talk of stagflation.
BTC price fell below $87,000 by the end of the day, according to data from Cointelegraph Markets Pro and TradingView.
After hitting an all-time high on November 13, the market turned downward and found no support above $90,000.
The latest US inflation data in the form of the Producer Price Index (PPI) for October shows that inflationary forces are returning as the Federal Reserve cuts interest rates.
The October PPI was 2.4%, 0.1% higher than expected, according to Bureau of Labor Statistics data.
“Both PPI and CPI inflation are now officially on the rise with core inflation above 3.0%,” trading resource Kobeissi Letter reacted to X.
“The Federal Reserve’s mission is not over yet.”
The ostensibly problematic price rise in risk assets and cryptocurrencies has brought a new wave of financial policy hawkism back into the consciousness of traders.
The odds of another rate cut at the Fed’s December meeting were 58% on Nov. 15 and 82% the day before, according to CME Group’s FedWatch tool.
Fed target interest rate probability. Source: CME Group
Kobeissi went on to warn that rising prices and a weakening labor market could create a new problem for the Fed: stagflation.
“This is a nightmare situation for the Fed because it puts them in a lose-lose situation,” he explained.
“If you raise interest rates, the economy will fall into recession, and if you lower interest rates, inflation will rise further.”
BTC price faces “aggressive” selling and near $86,000.
With Bitcoin drying up amid inflation numbers and callous language from Federal Reserve Chairman Jerome Powell, analysis called for protection around the $87,000 region.
relevant: Bitcoin adjusts as US inflation data emerges. Is the rally to $100,000 in jeopardy?
Popular trader Skew determined the low period: “There will likely be identical passive buyers at the three lows around $87,000 before the price finally settles.”
“There are probably over 800 BTC filled, which is very situational for this low because if we lose again we can sell some of that risk.”
This is a BTC/USDT 5-minute chart with liquidity. Source: Tilt/X
Skew then spied what he called “aggressive sellers trying to force” BTC/USD lower.
Meanwhile, Keith Alan, co-founder of trading resource Material Indicators, argued that a return to the mid-$80,000s could ultimately be cathartic for BTC price strength.
“A retest of support at $86,000 would be healthy for $BTC and would provide insight into whether this “TrumpPump’s pace can sustain for a quick run to $100,000 or if momentum will cool.” “More than 5 minutes,” he told X followers.
Allen later suggested that Bitcoin could hit its ultimate psychological target of $100,000 as soon as the Thanksgiving holiday ends on November 28.
But doing so required maintaining an upward short-term trend line.
“If support fails on the line, the price will look for support in the $75,000-$76,000 range,” he warned.
BTC/USD 4-hour chart. Source: Keith Alan/X
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.