Bitcoin declines to $25K as US PPI data meets Credit Suisse meltdown
Bitcoin (BTC) kept bears sweating near $25,000 on March 15 as encouraging macroeconomic data combined with concerns over banking crisis contagion.
PPI offers ‘good signs’ on Fed pivot
Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD recovered from a 24-hour slump to see highs of $25,273 on Bitstamp.
The pair reacted positively to the latest data from the US producer price index (PPI), which came in far lower than expected.
Before the release, the Binance order book showed main bid and sell liquidity parked at $22,000 and $26,000 respectively.
“Time will tell if there is enough bid liquidity to insulate $22,000 from being hit,” chain monitoring resource Material Indicators wrote in a section of accompanying comments while uploading the data to Twitter.
For Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight, the signs were that the Federal Reserve and Chairman Jerome Powell would abandon interest rate hikes at next week’s crucial meeting.
“PPI comes in at 4.6%, while 5.4% was expected. Massive miss, resulting in inflation going down. Powell to swing?” he asked.
“At least 25 bps seems very likely (or no increases with banking problems). Great signs!”
The PPI joined already high Consumer Price Index (CPI) data released the previous day, these accompanying nine-month highs for Bitcoin as the crypto took full advantage of the unfolding US banking crisis.
A day later, however, the focus was on Europe as European bank stocks were halted on volatility, with one in particular, Credit Suisse ( CS ), hitting new record lows.
CS was down over 25% at one point before a reversal took it above the $2 mark.
“Silicon Valley Bank had about $209 billion in assets. Credit Suisse has about $578 billion in assets,” Genevieve Roch-Decter, CEO of financial insights firm Grit Capital, commented on the situation.
“This is a much bigger problem developing.”
Dollar rises, ignores US inflation data
Crypto, meanwhile, faced headwinds from an arguably unlikely source on the day in the form of increasing US dollar strength.
Related: Bitcoin to $100K Next? Analyst Sees ‘Textbook Perfect’ BTC Price Movement
Despite the economic data showing declining inflation and more favorable conditions for risk assets, the US Dollar Index (DXY) hit 105 for the first time since the March 1 Silicon Valley Bank implosion.
To explain, market commentator Tedtalksmacro pinned the blame on Europe’s banking woes.
“Bank contagion is now spreading to Europe, Eurobond yields are sharply lower and therefore the EUR is also sharply lower,” part of a tweet read.
DXY measures the dollar’s strength against a basket of major trading partner currencies. Its performance is traditionally inversely correlated with crypto markets.
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