Bitcoin rebounded to $97,300, driven by lower-than-expected US PPI data and rumors about Trump's policy, with the release of December CPI data tonight (1/15) being the market focus.
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PPI lower than forecast, market focuses on CPI
After briefly falling below the $90,000 mark, BTC rebounded from the low, challenging the $97,700 high, driven by two positive news, including rumors that Trump is preparing to issue an executive order favorable to the cryptocurrency industry, and the US Producer Price Index (PPI) data coming in lower than expected.
As recent US economic data has been strong, the market has started to lower its expectations for rate cuts this year, affected by rising US bond yields and a stronger US dollar, the market generally believes that BTC will consolidate in the near term.
The US December CPI data will be released tonight (1/15) at 21:30. The market currently expects the CPI year-on-year rate to be 2.9% and the core CPI year-on-year rate to be 3.3%. The data may rise from 2.7% in November to 3.0%, and the core CPI year-on-year rate may rise from 3.3% to 3.4%, both higher than expected.
The rise in the CPI year-on-year rate may be temporary, as the base effect is expected to cause the inflation year-on-year rate to decline in the second quarter of 2025, and the overall CPI and PCE inflation rate are expected to reach the Fed's 2% target. However, the core inflation rate may remain above 2% for most or all of 2025.
What is the outlook for BTC tonight?
Due to the uncertain US inflation outlook and the need to eliminate "excessive leverage" in the derivatives market, it is best to avoid contracts, and those who have open positions should set proper stop-loss orders to guard against sudden price movements.
If the CPI is indeed higher than expected, the unexpected rise in inflation will catch the market off guard and further weigh on cryptocurrency prices. It may also affect the Fed's rate cut strategy.
The 10% rebound from the bottom in two days is due to expectations of Trump's policies, and to be blunt, the $90,000 support has been tested 7 times, with buying power being quickly absorbed, so the "wolf is coming" story has been played out 7 times, and the drop below $90,000 the other day was the most severe.
Going forward, if Trump's positive news is not as expected after taking office, the $90,000 level will not hold, and BTC must break above $103,000 to regain the uptrend, otherwise a downward shift in the top will be confirmed, leading to the next support level.
The overall market liquidity is still active, as it only took 24 hours to rebound from $89,000 to $97,000, and if it falls back to $89,000 now, over $150 million in long positions will be liquidated, making this a classic case of both longs and shorts getting squeezed, so we can understand that the market's essence is still repeatedly harvesting contracts, so if it goes back to $89,000 in the next few days, it should not be surprising, as this is a necessary part of the market's harvesting process.
Overall, with the CPI data release tonight, significant volatility is inevitable, so those with leverage should be cautious.
The current cost price for short-term participants is around $88,300-$89,000. The drop the other day just fell around this level, which is the breakeven point for short-term participants, so it is relatively important.
The selling pressure in the spot market is not too high overall, and the current round of selling is not due to on-chain spot issues. The spot pressure continues to decline, which may be due to short-term volatility or derivatives-related issues.
The downward trend in the market has not affected the overall accumulation trend in the market. Meanwhile, accumulation means potential selling pressure is reduced, and there are still underlying buyers for BTC even in a relatively poor environment.
The $90,000 level is still relatively friendly for the spot market.
If positions are low, this is a relatively good opportunity to get on board during this period.
