Bitcoin (BTC) starts a new week still riding high near $37,000 as macroeconomic data returns to the fore.The largest cryptocurrency continues to circl
Bitcoin (BTC) starts a new week still riding high near $37,000 as macroeconomic data returns to the fore.
The largest cryptocurrency continues to circle its highest levels in 18 months, with excitement over a possible exchange-traded fund (ETF) approval in the United States driving sentiment.
That is getting increasingly greedy, however, as according to the Crypto Fear & Greed Index, conditions match those seen as BTC price action hit its current all-time highs in late 2021.
What could shake up the status quo to produce volatility in the coming days?
The odds of an external trigger are more significant this week. A raft of U.S. macro data, including the Consumer Price Index (CPI), has the potential to disrupt any sideways trading activity across risk assets.
Multiple officials from the Federal Reserve are also due to speak, while the precarious geopolitical situation in the Middle East grinds on in the background.
On the institutional side, meanwhile, the future looks firmly bullish for Bitcoin — ahead of the prospective ETF approval, the Grayscale Bitcoin Trust (GBTC) is closing in on parity with net asset value.
Can Bitcoin markets stay the course and avoid a significant retracement? Cointelegraph takes a look at conditions in the weekly rundown of BTC price volatility catalysts waiting in the wings.
Funding rates flash warning with BTC price stuck at $37,000
Bitcoin’s weekly close set a new 18-month high on Nov. 12, but what followed was not the gains seen after other recent closes.
During the Asia trading session, BTC/USD instead fell below $37,000, sticking firmly to the trading range in place throughout the weekend, per data from Cointelegraph Markets Pro and TradingView.
Monitoring the situation, popular trader and analyst Credible Crypto suggested that this would soon change. The reason, he said, was open interest (OI), now at multi-day highs and apt to spark volatility.
“OI has ramped right back up off the lows which means more positions to squeeze out,” part of an X post read.
Credible Crypto gave a target of $36,600 for a potential local low, with another post adding that Bitcoin was “very close” to further upside.
Countering the optimism over short-term market action was funding rates. These were not only positive, but at their highest since Bitcoin’s November 2021 all-time highs, indicating an overall disadvantage of being long BTC at current levels.
Bitcoin’s funding rates are at the highest level since last ATH. pic.twitter.com/mMlnJleQ5u
— Thomas Kralow (@TKralow) November 12, 2023
“Pretty elevated levels of funding rates across the board,” fellow trader Daan Crypto Trades commented alongside data from monitoring resource CoinGlass.
“Even though this isn’t always an immediate reason for a flush, ideally this goes back to normal after some more ranging. Good to note that during strong up trends, this can stay this way for weeks or even months.”
Also noting the conspicuous state of play on funding, popular analyst Caue Oliveira told traders to exercise caution.
“This value suggests that optimism is prevailing in the market, driving a high number of futures contracts to bet on an increase in price,” he wrote in an Quicktake market update for on-chain analytics platform CryptoQuant on Nov. 10.
“However, this setup is dangerous as it can demonstrate excessively bullish sentiment and a price contraction could trigger a cascade of liquidations.”
CPI comes amid fresh U.S. gov’t shutdown turmoil
A classic macro setup marks the third week of November — CPI leads a deluge of data prints which have sparked risk asset volatility in the past.
Due on Nov. 14 for the month of October, the CPI print is keenly watched by inflation monitors, with the Producer Price Index (PPI) following a day later.
Various Fed officials will also take to the stage in speaking engagements both during and after the data releases, providing insights into the Fed’s perspective on inflationary forces in real time.
“Important week for inflation and the Fed,” financial commentary resource The Kobeissi Letter summarized while uploading significant macro diary dates to X.
Key Events This Week:
1. October CPI Inflation data – Tuesday
2. October PPI Inflation data – Wednesday
3. Retail Sales data – Wednesday
4. Philly Fed Manufacturing data – Thursday
5. Building Permits data – Friday
6. Total of 14 Fed speaker events
Important week for…
— The Kobeissi Letter (@KobeissiLetter) November 12, 2023
Popular trader Skew meanwhile noted expectations pointing to receding inflation, this despite some unwelcome surprises in October’s data prints.
This should notionally provide a tailwind for crypto markets, but as Cointelegraph reported, Bitcoin’s reaction to even larger target misses has become muted this year.
CPI & PPI this coming week
CPI – Tuesday 14th Nov
PPI…
cointelegraph.com
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