Inflation Concerns Continue As BTC Holds Its Ground

Despite hovering around the mark, Bitcoin maintained its position at $52,000 as Wall Street commenced trading on February 16th, while the latest macroeconomic data by the United States exceeded expectations. Other data indicated stability in BTC price as the final TradFi trading session of the week began.

Following the release of the Consumer Price Index (CPI) two days prior, the Producer Price Index (PPI) figures for January raised concerns about inflation in the US Year-on-year, PPI stood at 0.9%, slightly lower than the previous month but still 0.3% higher than market forecasts. Moreover, the combination of high CPI and PPI results prompted caution in the markets regarding potential adjustments to fiscal policy by the Federal Reserve this year.

Cutting Interest Rates

According to data by the FedWatch Tool, the likelihood of a Fed interest rate reduction at its March meeting was 8.5% at the time of reporting, significantly lower than the 17.5% probability at the beginning of the week. A March interest rate cut is likely completely ruled out after this data, trading resource The Kobeissi Letter commented on X, echoing its response to CPI. Furthermore, a May rate cut has become questionable as well.

Bitcoin had reached $52,884 on Bitstamp the previous day, marking its highest level since late November 2021, but faced resistance via sellers. Analyzing four-hour timeframes, popular trader Skew highlighted the significance of the 21-period exponential moving average (EMA), currently positioned around $51,000. There has been choppy price action here with a lot of inside bar closes essentially within the same intraday balance, he observed.

Other News

Elsewhere, U.S. spot-Bitcoin exchange-traded funds (ETFs) saw net inflows of nearly half a billion dollars on February 15th, contributing to a strong week where the ETF products regained attention more than a month after their initial launch. However, despite removing more BTC than adding to it daily within its circulation, the ETFs raised some concerns among market observers.

Strategists at Goldman Sachs Group Inc. and MFS Investment Management are among those talking up prospects in Europe. After being out of favor with investors for so long, stock valuations look enticing compared with their pace-setting US peers. Plus, there is no threat of Magnificent Seven tech bubble popping.

Additionally, fund managers are becoming increasingly concerned about a systemic credit event as alarms sound in global property markets. According to the most recent Global Fund Manager survey, about one in six of those polled believe such a crunch is the most serious tail risk facing markets. The growing concern about US commercial real estate and Chinese property markets has pushed it to third place among respondents, trailing only higher inflation and geopolitical tensions.