The price of Bitcoin (BTC) increased by 3% on May 13 as cryptocurrency traders anticipated price volatility ahead of the upcoming United States macroeconomic data update. Data from Cointelegraph Markets Pro and TradingView showed that the intraday high for BTC was $63,269 on Coinbase shortly after the Wall Street market opened on May 13.
This week, market participants are eagerly awaiting the release of United States inflation data, which will help determine whether the Federal Reserve will lower interest rates in 2024. The U.S. Producer Price Index (PPI) is expected to be released on Tuesday, May 14, followed by the Consumer Price Index (CPI) reading on May 15.
According to the CME’s FedWatch tool, market analysts are forecasting a 72% chance of interest rates remaining the same at the Federal Open Market Committee (FOMC) meeting in July, with the possibility of rate cuts being pushed to later in 2024, currently at 48.6% for the September meeting. Traders are predicting a 91.1% chance that rates will remain unchanged at the June meeting.
Popular analyst Tedtalksmacro commented on the market dynamics for this week, stating that the “inflation data is center-stage.” The analyst explained that reducing inflation would be “good for risk assets like Bitcoin” and could potentially lead to a surge in the market.
Another analyst, Seth, shared a chart on X showing that the relative strength index (RSI) had broken above a descending trendline on the daily timeframe. The analyst acknowledged that this week’s CPI, Core CPI, PPI, and FED chair speech are likely to have an impact on the direction of BTC’s price.
Bitcoin has been experiencing a prolonged downtrend since reaching its all-time high of $73,835 on March 14. The price has been recording lower highs and lower lows, with the RSI trending lower and reaching near-oversold conditions at 33 on May 1.
Data from CryptoQuant shows that the Coinbase Premium Index has been mirroring BTC’s price action, dropping from $0.08 to near zero during the same period. The Coinbase Premium Index is an indicator that represents the percentage difference between the BTC/USDT pair on Binance and the BTC/USD pair on Coinbase Pro. According to an analyst at CryptoQuant, this index is an important “leading” indicator that can be used to predict the future price of BTC. Historically, when this indicator turns negative and reverses from a downward to an upward trend, the BTC price has always rebounded.
Crypto trader Moustache expressed optimism, stating that the current moves should result in a more sustained upside as seen in previous post-halving cycles. In a post on X, he advised his followers that “Weak hands need to get out of the market first before $BTC will rise toward $80,000.”
Please note that this article does not provide investment advice or recommendations. Readers should conduct their own research before making any investment or trading decisions.