Bitcoin traders expect Fed Chair Powell to ‘pump our bags’ and BTC to target $80K+
Bitcoin (BTC) price rose 3% on May 13 as crypto traders anticipated price volatility ahead of this week’s U.S. macroeconomic data update.
Data from Cointelegraph Markets Pro and TradingView showed intraday BTC price high of $63,269 on Coinbase shortly after the Wall Street open on May 13.
This week, market participants await the United States inflation data to help determine whether the Federal Reserve will lower interest rates in 2024.
The U.S. Producer Price Index (PPI) print is expected on Tuesday, May 14, followed by the Consumer Price Index (CPI) reading on May 15.
According to the CME’s FedWatch tool, market analysts forecast a 72% chance of rates remaining the same at July’s Federal Open Market Committee (FOMC) meeting, with the possibility of rate cuts pushed later in the year, at 48.6% at September’s meeting. Traders forecast a 91.1% chance that rates will remain unchanged at June’s meeting.
Commenting on market dynamics this week, popular analyst Tedtalksmacro said that the “inflation data is center-stage.”
“Expect volatility. However, this is the first time in a little while that we are likely to see inflation data slow.”
The analyst explained that reducing inflation will be “good for risk assets like Bitcoin,” putting the market on the “verge of a leg higher.”
Fellow analyst Seth shared the following chart in a May 12 post on X, saying 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” is likely to affect the direction of BTC’s price.
“Jerome Powell likely pump our bags. The U.S. economy isn’t as strong as the Data suggest. True Unemployment Rate published by the Ludwig Institute reports at 24.2% compared to 3.8% reported from U.S..Dep.Labor!”
Bitcoin price could rebound if Coinbase premium turns negative
Bitcoin has experienced an extended downtrend since turning away from its all-time high of $73,835 on March 14. The price has recorded a series of lower highs and lower lows as the RSI trended lower, reaching near-oversold conditions at 33 on May 1.
According to data from CryptoQuant, the Coinbase Premium Index has mirrored BTC’s price action, dropping from $0.08 to near zero over 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.
An analyst at CryptoQuant explains that the Coinbase Premium Index is an important “leading” indicator that can be used to predict the future of BTC price.
Historically, if this indicator turns negative and reverses from a downward to an upward trend, the BTC price has always rebounded, as shown in the chart below.
At the time of publication, the Coinbase Premium Index, although currently positive, “was close to zero,” the analyst added.
“If the historical pattern repeats itself, we may have a better chance of success if we wait a bit longer and invest on the rebound after the trend turns negative.”
Crypto trader Moustache showed his optimism, arguing that current moves should result in a more sustained upside as in previous post-halving cycles.
In a May 13 post on X, he told his followers, “Weak hands need to get out of the market first before $BTC will rise toward $80,000.”
“It has always been like this in the past. The structure is the same, only the price is different.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
