Bitcoin tests lower levels
Bitcoin fell below $80,000 on Thursday after US producer price data came in above forecasts. TradingView data showed BTC/USD touching its lowest level since Sept. 18, down as much as 1.8% on the day, before recovering to around $81,000. The move was not a straight collapse, but it did add pressure to a market already dealing with weaker risk appetite.
PPI surprise adds to inflation worries
The Bureau of Labor Statistics reported that final demand rose 6.3% for the 12 months ended in September, while core PPI increased to 5% versus an expected 4.4%. The release said the September advance was the largest since March 2022 on one measure, and the 12-month gain was the biggest since December 2022. The numbers arrived a day after the Consumer Price Index also overshot estimates, which pushed crypto and other risk assets lower. A tech sell-off in South Korea added to the mood, with the KOSPI Composite Index falling 7.5% on Thursday.
Economist Mohamed El-Erian described the PPI result as even more striking than the CPI print. Still, US bond yields did not rise with the inflation data. The 10-year Treasury yield was down almost 3% at the time of writing, at its lowest since Sept. 23. Robin Brooks, former chief FX strategist at Goldman Sachs, said yields had decoupled from US macro data as markets focused more on the federal budget deficit. He noted that the 30-day correlation between upside data surprises and daily moves in the 10-year yield had dropped from near 0.6 earlier this year to just below zero by the end of August.
Key moving averages back in view
On the charts, two support trend lines are back in focus: the 21-week and 50-week exponential moving averages at $76,144 and $78,459. Trader and analyst Rekt Capital said Bitcoin could still retest both and keep its overall bullish trend intact. He noted that deviations below those levels during a volatile retest to find a pullback bottom have happened historically in early-stage bull markets. But those deviations came after bullish crossovers of the two EMAs, while Bitcoin is still pre-crossover.
Bitcoin also remained below the $82,500 to $82,800 area, a support zone watched in recent weeks. Analyst Aksel Kibar said the latest weekly close around $83,700 lacked strength as a breakout. A weekly close inside the range could resume wide consolidation between $60,000 and $82,800, he said, with $75,000 as a possible negation level for the rectangle bottom reversal pattern.
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