As crucial macroeconomic announcements are anticipated to shape market trends in the upcoming week, Bitcoin has experienced another decline ahead of the US Producer Price Index (PPI) report.
Starting the week at a resistance level of $80,000, Bitcoin has since slipped beneath $78,000 in anticipation of the PPI data release.
Similarly, the altcoin sector has not fared well, with many cryptocurrencies such as Ethereum, XRP, and BNB also experiencing drops in value.
Today’s PPI, along with tomorrow’s Consumer Price Index (CPI), are both critical data points that could sway the Federal Reserve’s decision on interest rates for September. Currently, market expectations place the likelihood of a rate increase at 62.2%, according to Fed WatchTool data.
Analysts suggest that if the PPI results are lower than anticipated, it might indicate a relaxation of inflation pressures and enhance the chances for a Fed rate cut. This could lead to a positive market reaction for Bitcoin and other risk assets. On the other hand, higher-than-expected PPI numbers could dampen hopes for a rate cut and put immediate selling pressure on Bitcoin.
While the market’s focus is sharply tuned into today’s PPI data, it’s worth noting that the August figures have also been released, serving as a key indicator for the Fed’s decision-making.
Released Data:
Core Producer Price Index (Monthly): Reported at 0.2% – Forecast was 0.3% – Previous was 0.2%
Core Producer Price Index (Annual): Reported at 4.6% – Expected was 4.6% – Previous was 4.2%
Producer Price Index (Monthly): Reported at 0.4% – Expected was 0.4% – Previous was 0.0%
Producer Price Index (Annual): Reported at 5.4% – Expected was 5.3% – Previous was 4.7%
Bitcoin’s immediate reaction post-PPI data:
*This information should not be considered as investment advice.