BTC price tests $17K on PPI as Bitcoin analysts eye CPI, FOMC catalysts

Bitcoin (BTC) fell connected the Dec. 9 Wall Street unfastened arsenic United States economical information appeared to disappoint markets.

BTC/USD 1-hour candle illustration (Bitstamp). Source: TradingView

Attention turns to Bitcoin vs. CPI "big trigger"

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD dipping to travel person to $17,000 aft passing the level overnight.

The brace reacted severely to U.S. Producer Price Index (PPI) data, which contempt being supra expectations inactive bushed the readout from the period prior.

“Bit of an implicit absorption towards PPI, which has been dropping importantly from past month, but little than expected,” Michaël van de Poppe, laminitis and CEO of trading steadfast Eight, responded.

Van de Poppe, similar others, noted that the crux of macro cues would travel adjacent week successful the signifier of Consumer Price Index (CPI) people for November.

“CPI adjacent week is the large trigger, conscionable similar it was earlier this month,” helium added.

CPI could beryllium a seminal point, trading steadfast QCP Capital continued, arsenic if it were to proceed its downward trend, markets whitethorn get an adjacent stronger condemnation implicit little ostentation greeting the caller year.

The Federal Reserve’s Federal Open Market Committee (FOMC) gathering days later, wherever policymakers determine connected involvement complaint hikes, should adhd substance to the fire.

“Tuesday’s CPI volition yet again beryllium ‘the astir important CPI merchandise ever’, this clip due to the fact that the marketplace has acceptable it up to beryllium with its epic 2-month abbreviated compression rally,” QCP wrote successful a marketplace update connected the day.

“At the FOMC, Fed members volition merchandise their updated projections of ostentation and involvement rates. Markets volition absorption connected wherever they forecast ostentation adjacent year, arsenic good arsenic wherever they spot rates successful 2023 and 2024. Both these events are the past remaining hurdles for the rally into year-end.”

Analysts acknowledged that if CPI were to disappoint, it would perchance “invalidate” the stocks rally truthful far. A 50-basis-point complaint hike had a 77% probability of occurring, according to CME Group's FedWatch Tool.

Fed people complaint probabilities chart. Source: CME Group

U.S. dollar catches a break

U.S. equities were level aft the archetypal hour's trading, with PPI failing to marque a important dent successful performance.

Related: GBTC 'elevator to hell' sees Bitcoin spot terms attack 100% premium

For macro economist and stocks expert James Choi, this was to beryllium expected, fixed that the Fed was already considering decreasing the gait of its complaint hikes.

"The FED already pivoted its course. Today's PPI won't marque a dent to Powell's plan. It's 50bp adjacent week, past that's it," he forecast, besides saying that his calculations predicted a "much, overmuch lower" CPI speechmaking than galore believed.

Meanwhile, U.S. dollar spot besides simmered, the U.S. dollar scale (DXY) attempting to marque up for the erstwhile day's lost ground connected the backmost of PPI.

U.S. dollar scale (DXY) 1-hour candle chart. Source: TradingView

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