Bitcoin, may face a process of giving back its early-week gains on May 14 due to increased volatility in macro data reports. Data from TradingView showed that Bitcoin price weakness entered hourly intervals, causing a drop to $61,440 on centralized crypto exchanges. The BTC/USD pair had risen to $63,450 the previous day, a level recorded as a clear danger for short positions in the futures market.
Developments on the Bitcoin Front
Trade source Material Indicators warned in a post on X at the time that if Bitcoin could surpass $63,000, short positions in the futures market would be squeezed.
Bulls ultimately failed to find momentum, and according to data from the data analysis platform CoinGlass, a large amount of liquidity moved downward at the time of writing. Material Indicators noted that bids strengthened at the $60,000 and $65,000 levels ahead of economic reports from the US.
These will be in the form of the day’s Producer Price Index (PPI) pressure along with comments from Fed Chair Jerome Powell. In another part of an X post, the following statements were shared on the subject:
“It is not unusual to see guardrails placed in the order book ahead of Fed talks and economic reports. It is also not unusual to see them withdrawn at the last minute.”
What to Expect on the US Front?
Given the potential impact of PPI figures, financial commentator Tedtalksmacro revealed an unusual setup this week. He noted that PPI would come before April’s Consumer Price Index (CPI) data, presenting a rare scenario for investors that does not account for wildcard deficiencies in the data:
“Today, it is a rare situation where US PPI data is released a day before CPI data. There is a very strong correlation between PPI and CPI data. Historically, PPI leads CPI figures. Therefore, we expect the market to react more severely than usual if expectations are missed.”
Data from CME Group’s FedWatch tool highlighted the need for significant surprises to change the market’s expectations that the Fed would cut rates before September. The probability of a 25 basis point cut at the Federal Open Market Committee’s (FOMC) June meeting was only 3.5% at the time of writing, while this rate was 24.6% for the July meeting.
