Bitcoin Sees New 4-Month High As US PPI, Retail Data Record ‘Big Misses’
Bitcoin (BTC) set another multi-month high before Wall Street opened on January 18 as US macroeconomic data fell well short of expectations.
US PPI figures fall well below target
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD rising to $21,646 on Bitstamp.
A subsequent correction saw the pair hover around $21,400 at the time of writing, with US stocks reacting to surprising data around economic activity in December.
In particular, the producer price index (PPI) showed that cost increases cooled faster than consensus predicted, with retail sales also falling beyond estimates.
“PPI comes in at 6.2%, while expectation was 6.8%. Core PPI comes in at 5.5%, while expectation was 5.7%,” Cointelegraph contributor Michaël van de Poppe tweeted.
“Retail sales of -1.1%, while -0.8% was expected. Core retail sales of -1.1%, while -0.4% was expected. Big misses.”
Bitcoin showed bullishness around the numbers, which potentially signal less need for further aggressive rate hikes from the Federal Reserve going forward.
Earlier, the Bank of Japan announced that it was not ready to tighten its very loose monetary policy, unlike the Fed and other major central banks.
An already flagging US Dollar Index (DXY) thus extended a retracement that began with the Japan news when the PPI hit, falling to 101.52, its lowest since late May last year.
Analysis sees “momentum fading” on BTC chart
BTC/USD last traded at the high of the day in mid-September.
Related: BTC Price Cancels FTX Losses – 5 Things to Know in Bitcoin This Week
As always, there was plenty of nerves visible among traders despite the strong performance, with analytical resource Material Indicators repeatedly warning of weakness in the uptrend.
“Waking up to the same game in the BTC chart,” it wrote on the day, citing the status quo of the Binance order book.
“Decreasing volume leads me to believe that momentum is waning and the fact that some bids were removed is concerning. Watching to see if bid liquidity continues to fill up and increase. If not, the 21-week moving average must hold.”
More optimistic was popular commentator Bloodgood, who disputed others’ bearish predictions of a fall to $12,000 for BTC/USD in 2023.
Analyzing the picture over a longer period of time, he argued that the two-year low months in Q4 constituted a “failed breakdown.”
“Failed breakouts usually lead to strong reversals,” he added on an accompanying chart with a key support zone around $19,000.
“$12k is out of the question as long as we stay above the blue line. Get another weekly candle to close and we’ll go higher.”
A snapshot of long and short positions by Filbfilb, co-founder of trading company Decentrader, was similarly encouraging.
“The liquidity picture looks much different now for BTCUSD. More bears are sweating than bulls at this point,” he tweeted.
The views, thoughts and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
