Bitcoin (BTC) edged closer to $61,500 as markets opened on October 11, despite fresh surprises on U.S. inflation.
BTC/USD 1-hour chart. Source: TradingView
Bitcoin Avoids Dip as PPI Raises Inflation Worries
Data from TinTucBitcoin and TradingView showed a new local high of $61,476 on Bitstamp.
The latest US economic data, specifically the Producer Price Index (PPI), beat estimates, recording 1.8% versus the expected 1.6%.
“The index for final demand excluding food, energy, and trade services increased 0.1 percent in September after increasing 0.2 percent in August,” according to an official press release from the Bureau of Labor Statistics (BLS).
“In the 12 months ended September, prices for final demand excluding food, energy and trade services increased by 3.2%.”
Monthly % change in US PPI. Source: BLS
Thus, PPI has joined the Consumer Price Index (CPI) in signaling rising inflationary pressures, giving the Federal Reserve a nightmare.
In response, trading source The Kobeissi Letter used the results to argue that the Fed's 0.5% rate cut last month was unnecessary.
“Both PPI and core CPI inflation have officially returned to rising territory,” the X article said.
“The Fed didn't need to cut rates by 50 basis points.”
Thanks to the Fed’s move, cryptocurrencies and risk assets have begun to diverge this week, as stocks climb higher while Bitcoin and altcoins come under selling pressure.
The PPI print has a moderate impact on market expectations for the Fed's next rate move in October. According to CME Group's FedWatch Tool, the odds of a cut of less than 0.25% were nearly 84% today, with a roughly 17% chance of rates remaining at current levels.
Probability of Fed's target interest rate. Source: CME Group
Trader points out key BTC price levels to watch
Following BTC price action, market observers see potential for a retest of resistance at higher levels on the chart.
“Bitcoin recovered $60,600/$800 overnight,” analyst Justin Bennett wrote, referencing the recovery from lows of $58,860.
“I never believe in a rally in Asia, but if this level holds, we could retest $62,000.”
BTC/USDT 4-hour perpetual contract chart. Source: Justin Bennett/X
Popular trader Roman spotted significant divergence while hoping for a revisit to the $65,000 level next.
At the same time, trader Anbessa identifies two key levels above and below the current price to watch in the short time frame.
“A $63.9k recovery and s/r flip will lead to a short-term continuation breakout,” he shared with his X followers.
“- A drop to $60.2k could put us on the verge of another (possibly final) decline.”
BTC/USD 8-hour chart. Source: Anbessa/X
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