Bitcoin (BTC) kept the bears sweating near the $25,000 level on March 15 as encouraging macroeconomic data combined with concerns about contagion from the banking crisis.
PPI offers “big signals” on the Fed’s pivot
Data from Cointelegraph Markets Pro and TradingView showed that the BTC/USD pair rebounded from a 24-hour drop to hit highs of $25,273 on Bitstamp.
The pair reacted positively to the latest US Producer Price Index (PPI) data, which came in much lower than expected.
Prior to press, the Binance order book showed principal buy and sell liquidity parked at $22,000 and $26,000, respectively.
“Time will tell if there is enough supply liquidity to prevent a $22,000 hit”, wrote Material Indicators in part of the comment that accompanied the publication of the data on Twitter.
For Michaël van de Poppe, a Cointelegraph contributor and founder and CEO of trading firm Eight, there were signs that the Federal Reserve and its chairman, Jerome Powell, would abandon interest rate hikes at next week’s decisive meeting.
“The PPI stands at 4.6%, when 5.4% was expected. A massive failure, which translates into a drop in inflation. Will Powell take action on the matter?” asked.
“At least 25 bp seems very likely (or no increases with the banking problems). Great signs!”
The PPI joined already positive Consumer Price Index (CPI) data released the day before, which accompanied Bitcoin’s nine-month highs, as the cryptocurrency made the most of the US banking crisis.
A day later, however, The focus turned to Europe as European bank stocks halted on volatility and one in particular, Credit Suisse (CS), hit new record lows.
CS was down more than 25% at one point, before a trend reversal took it above the $2 mark.
WTF? The markets are now pricing in a probability of default of 47% for Credit Suisse. What have I missed? pic.twitter.com/Q2MMo0T3LV
—Holger Zschaepitz (@Schuldensuehner) March 15, 2023
That? Markets are now pricing in a 47% probability of default for Credit Suisse. What have I missed?
“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 in the making.”
Dollar rises, ignores US inflation data
Meanwhile, cryptocurrencies faced headwinds from an unlikely source today, in the form of a surge in US dollar strength.
Despite economic data showing lower inflation and more favorable conditions for risky assets, the US dollar index (DXY) hit 105 points for the first time since the Silicon Valley Bank implosion on March 1. .
Market commentator Tedtalksmacro blamed Europe’s banking problems.
“Banking contagion is spreading to Europe, euro bond yields have fallen sharply and therefore the euro has also fallen sharply,” He said part of a tweet
“EUR represents 58% of DXY. So EUR down = DXY up.”
DXY measures the strength of the dollar against a basket of major trading partner currencies. Its performance is traditionally inversely correlated with crypto markets.
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