Bitcoin holds strong at $52K despite disappointing US PPI data as market shrugs off Fed rate cut speculation

Bitcoin (BTC) remains at $52,000 during the Feb. 16 Wall Street opening, as the latest macro data in the United States surpasses expectations.

The Federal Reserve’s stance on cryptocurrency has been a hot topic, with many wondering about their policy and views on the matter. In January 2022, the Fed will have a meeting to discuss their stance on crypto. Many are eager to hear what they have to say, as the crypto market continues to remain hot. Additionally, with the Consumer Price Index (CPI) being closely tied to the crypto market, the Fed’s stance on crypto may have a significant impact on the market’s future.

The Fed’s lack of action on crypto adds to Bitcoin’s struggles

Data from Cointelegraph Markets Pro and TradingView showed that Bitcoin’s price remained stagnant during the last trading session of the week.

Following the release of the Consumer Price Index (CPI) two days ago, the Producer Price Index (PPI) for January only added to the concerns about inflation in the US.

The PPI for January was 0.9%, slightly lower than the previous month but still higher than market expectations.

This, combined with the “hot” CPI, has made the market more hesitant about the possibility of the Federal Reserve easing fiscal policy this year.

According to CME Group’s FedWatch Tool, the chances of an interest rate cut at the Fed’s March meeting were only at 8.5% at the time of writing, compared to 17.5% at the beginning of the week.

The Kobeissi Letter, a popular trading resource, stated on X (formerly Twitter) that “a March interest rate cut is most likely off the table after this data,” echoing their response to the CPI.

Bitcoin reached a high of $52,884 on Bitstamp the day before, its highest level since late November 2021, but faced selling pressure from bears.

In analyzing the four-hour timeframes, prominent trader Skew noted the significance of the 21-period exponential moving average (EMA), currently at around $51,000.

“Price action has been choppy, with many inside bar closes within the same intraday range,” he wrote.

Analyst Predicts BTC Drop if ETF Inflows “Dry Up”

On February 15th, the U.S. saw a significant increase in net inflows for Bitcoin exchange-traded funds (ETFs), totaling almost half a billion dollars.

This surge in interest came as a surprise to many, as the ETF products had already been launched over a month ago.

However, despite the fact that the ETFs are removing more BTC from the market than they are adding on a daily basis, some experts are expressing concerns about the potential consequences.

In a recent analysis by Venturefounder on the on-chain analytics platform CryptoQuant, it was suggested that a decrease in ETF interest could lead to a major pullback in Bitcoin’s price.

“The flatlining or normalization of Bitcoin ETF net inflows could trigger a 20-30% correction,” the analysis stated, along with a summary of the current flow of funds.

A previous post also outlined potential support levels for BTC, with the lowest being at $34,000.