Crypto set to advance after PPI, with BTC being the biggest winner with $20,000 for New Year
|- Bitcoin and other major cryptocurrencies advance in tandem after a drop in US PPI numbers.
- BTC is set to rally into the remaining weeks of 2022 if inflation on Tuesday and Fed confirms.
- Expect possibly $20,000 near the closing bell on New Year’s eve.
Bitcoin, Ethereum, XRP and other cryptocurrencies are advancing after a drop in US PPI numbers. The drop comes after both the core PPI and the overall PPI dropped substantially, which points to the fact that inflation in the US is set to drop lower on Tuesday. These two elements together will see the Fed adjusting their communication next week and could bring a dovish surprise with a bow for investors for this year
The devil in the detail for PPI
Bitcoin price gets underpinned above $17,000 and is set to jump higher as PPI numbers surprise both sides. The numbers from the previous month were all revised upwards, while the current data came out, although a little bit higher than estimations, was still fairly lower. Inflation is thus set to decrease, maybe not as quickly as we would want it to be, but it will come lower. For the Fed, they are good to go 50bp per hike and see a possible pivot by mid-next year.
BTC thus has room to jump higher once the revisions have been digested and markets are seeing the silver lining in this slew of data. Expect to see the recovery going further into the US session, with BTC set to hit $18,000 either by the US closing bell or over the weekend. Once the monthly pivot has been added to the bull camp, expect $19,036 to be the next victim for next week, with just two weeks remaining for that $20,000 level.
BTC/USD daily chart
Inflation data on Tuesday could still surprise the upside and point to a dislocation between CPI and PPI where factory prices get lower. Still, retail is not following, and consumers pay elevated prices. Expect the Fed to deliver an uneasy speech by confirming that they need to do more to bring inflation down. BTC would see bulls forfeit their positions and see a quick nosedive move toward $16,000 and possibly $15,000 in the days after.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.