Bitcoin (BTC) fell on the Dec. 9 Wall Street open as United States economic data appeared to disappoint markets.
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD dipping to come closer to $17,000 after passing the level overnight.
The pair reacted badly to U.S. Producer Price Index (PPI) data, which despite being above expectations still beat the readout from the month prior.
“Bit of an over reaction towards PPI, which has been dropping significantly from last month, but less than expected,” Michaël van de Poppe, founder and CEO of trading firm Eight, responded.
Van de Poppe, like others, noted that the crux of macro cues would come next week in the form of Consumer Price Index (CPI) print for November.
“CPI next week is the big trigger, just like it was earlier this month,” he added.
CPI could be a seminal point, trading firm QCP Capital continued, as if it were to continue its downward trend, markets may get an even stronger conviction over lower inflation greeting the new year.
The Federal Reserve’s Federal Open Market Committee (FOMC) meeting days later, where policymakers decide on interest rate hikes, should add fuel to the fire.
“Tuesday’s CPI will yet again be ‘the most important CPI release ever’, this time because the market has set it up to be with its epic 2-month short squeeze rally,” QCP wrote in a market update on the day.
Analysts acknowledged that if CPI were to disappoint, it would potentially “invalidate” the stocks rally so far. A 50-basis-point rate hike had a 77% probability of occurring, according to CME Group's FedWatch Tool.
U.S. equities were flat after the first hour's trading, with PPI failing to make a significant dent in performance.
Related: GBTC 'elevator to hell' sees Bitcoin spot
Read more on cointelegraph.com