Bitcoin Prepares for Key PPI Data Release Amid Inflation Concerns
Bitcoin awaits the Producer Price Index data set to release on February 13, with key estimates indicating slight declines in inflation. A hotter PPI could hinder Fed rate cuts and negatively impact risk markets while a cooler PPI might bolster assets like Bitcoin. Market reactions reveal volatility in equities and a mix of gains and losses across cryptocurrencies amidst ongoing economic scrutiny.
Bitcoin (BTC) and the broader financial markets are poised for the upcoming Producer Price Index (PPI) report, set to be released at 8:30 a.m. ET on February 13. Following the recent Consumer Price Index (CPI) figures which exceeded expectations, this PPI report will provide crucial insights into inflation trends and inform potential future actions by the Federal Reserve.
The expected PPI metrics include Year-over-Year (YoY) and Month-over-Month (MoM) estimates, with the YoY PPI anticipated at 3.2%, a slight decline from the previous 3.3%. The MoM PPI estimate stands at 0.3%, up from 0.2% prior. Additionally, Core PPI estimates are set at 0.3% MoM, compared to last month’s 0%, and YoY at 3.3%, down from 3.5%. A hotter PPI reading may indicate persistent inflation, potentially delaying Federal Reserve interest rate cuts. Conversely, a cooler figure may bolster risk assets, including Bitcoin, by weakening the dollar and lowering Treasury yields.
The financial markets reacted sharply to recent CPI data, which witnessed U.S. Treasury yields climbing to 4.6% before retracting. The Dollar Index (DXY) surged to 108.5, later falling below 108. Bitcoin and major equities rebounded, ultimately closing positively. Should inflation remain elevated, the Federal Reserve might refrain from cutting interest rates, conflicting with President Trump’s pro-growth economic approach and potentially affecting both cryptocurrencies and equities, as noted by CoinDesk.
On February 14, The Sandbox (SAND) is set to unlock $80.5 million, while Arbitrum (ARB) follows on February 16 with a $45.1 million unlock. Fast Token (FTN) will unlock $79 million on February 21. There are heightened expectations following positive results from Robinhood.
Currently, Bitcoin’s derivatives positioning exhibits BTC and ETH funding rates holding around 5% annualized. Most major cryptocurrencies, with the exception of BNB, are facing selling pressure. Although Bitcoin options display a bullish skew, overall demand remains moderate. Spot Bitcoin ETFs experienced a daily outflow of -$251 million, maintaining total holdings at 1.174 million BTC, while ETH ETFs reported outflows of -$40.9 million, holding 3.788 million ETH.
In terms of technical indicators, Bitcoin trades below the 50-day Simple Moving Average (SMA), indicating potential for further downside. Immediate support for BTC is at $90,000, with a breach below this level signaling a continuation of bearish sentiment.
The current economic landscape includes the upcoming U.S. PPI and Jobless Claims report on February 13, with Retail Sales Data expected on February 14. In global equities, MicroStrategy’s stock rose by 2.3% to $326.82, Coinbase ascended by 3% to $274.90, pre-market at $283.80, while Riot Platforms increased by 0.18% to $11.16. In market trends, the S&P 500 fell by 0.24%, while NASDAQ rose by 0.03%. Gold has increased by 1.26% to $2,945.70 per ounce, with Bitcoin dominance sitting at 60.91%.
In summary, Bitcoin and financial markets are closely monitoring the forthcoming PPI report for indications of inflation trends and Federal Reserve policy actions. Expectations for PPI signal slight cooling inflation rates, but a hotter reading could delay potential interest rate cuts. The current economic environment shows a mixed market, with cryptocurrencies experiencing some selling pressure, but also notable unlock events and gains in select stocks.
Original Source: www.binance.com
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