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Bitcoin (BTC) fell at the Wall Street open on Dec. 9 as US economic data seemed to disappoint the market.
Cointelegraph Markets Pro and TradingView It showed BTC/USD approaching $17,000 after crossing levels overnight.
The pair reacted badly to US Producer Price Index (PPI) data. This is still above readings from the previous month, despite being better than expected.
“It’s an overreaction to PPI, which has fallen significantly since last month, but less than expected,” said Michal van de Poppe, founder and CEO of trading firm Eight. responded.
Van de Poppe, like others, pointed out that next week a core macro clue will emerge in the form of the November consumer price index (CPI).
“Like earlier this month, next week’s CPI will be a big trigger,” he added.
CPI could be a key point, continued trading firm QCP Capital. As if the downward trend continues, the market may enter the new year with greater confidence in lower inflation.
The Federal Reserve’s Federal Open Market Committee (FOMC) meeting is just days away, and policy makers should add fuel to the fire by deciding to raise interest rates.
“Tuesday’s CPI will once again be ‘the most important CPI release ever,’ this time as the market set it in an epic two-month short-squeeze rally,” QCP said in a market update for the day. wrote.
At the FOMC, members of the Fed will release their latest forecasts for inflation and interest rates. It will be the last remaining hurdle to move up towards the end of the year.
Analysts admit that if the CPI disappoints, it could “nullify” the stock rally so far. According to CME Group, there was a 77% chance of a 50 basis point rate hike. FedWatch Tools.
US stocks were flat after the first hour of trading, and the PPI failed to make a big impact on performance.
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Macroeconomist and equity analyst James Choi said this was not surprising given that the Fed was already considering slowing the pace of rate hikes.
“The Federal Reserve has already changed course. Today’s PPI has no impact on Powell’s plans. Next week is 50bp. That’s it,” he said. weatheralso said his calculations predicted a “much lower” CPI reading than many believed.
Meanwhile, the USD strength also weakened, with the USD Index (DXY) trying to make up for the foothold it had lost the previous day behind the PPI.
The views, thoughts and opinions expressed herein are those of the author only and do not necessarily reflect or represent the views or opinions of Cointelegraph.
