Earlier this week, favourable Consumer Price Index (CPI) data boosted market sentiments for the crypto market. Today, all eyes are on the Producer Price Index (PPI) as this crucial indicator could reinforce, or reverse, the fresh optimism for Bitcoin and other crypto assets.
The US CPI dropped to 2.3% in April, indicating a cooling of inflation in the US economy. As the data was confirmed on Tuesday, Bitcoin rallied to fresh highs, promising an all-time high soon. However, as profit-taking posed resistance, BTC prices have now dropped gradually to below $102K.
US PPI Data to Boost Crypto Markets?
Today, at 8.30 am EST, the U.S. Bureau of Labor Statistics will release the PPI data. Last month, the PPI final demand decreased 0.4 percent, and the index advanced by 2.7 percent year-on-year. If there is any improvement in these figures, it will be good news for the market and will demonstrate sustained deceleration for inflation in the US.
The US PPI tracks the wholesale-level price pressures and offers clues on whether inflation is truly cooling or merely shifting upstream. Consensus forecasts centre on a 0.3 percent monthly rise and a 2.7 percent annual gain in April’s PPI.
While the market has already factored in the consensus forecasts, any deviation from them in either direction can trigger panic in the crypto market.
The markets remain tense ahead of the data release, with BTC prices dropping 1.7% over the last 24 hours. The total crypto market cap has already rallied back above $3.38 trillion on optimism ahead of the data.
Initial Jobless Claims Report Adds Uncertainty
The U.S. Department of Labor’s weekly Initial Jobless Claims report is also scheduled for release today at the same time. This report provides the number of individuals filing for unemployment benefits for the first time during the previous week.
For the week ending May 3, the data showed a decrease in initial claims to 228,000 from 241,000 the previous week, indicating a resilient labor market. If the trend sustains, it could be a factor for crypto markets to climb higher in the coming days.
While numerous factors affect the movements in the crypto markets, major digital assets like Bitcoin and Ethereum have decisively moved into the macro camp. Meaning, changes in inflation, Fed rates, and GDP can have massive implications for them as more and more institutional money flows into the crypto markets.
While the prices remain volatile, BlackRock’s Bitcoin ETF has scooped up 2,250 BTC from the market on a single day on Wednesday. If today’s release indicates a favourable outcome like lesser inflation and a stable labor market, Bitcoin could therefore be entering the bull’s territory again to challenge its all-time high.
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