PMI Data May Reignite Crypto Volatility

by Marija Matic
By Marija Matic

Over the past two weeks, the cryptocurrency market, led by Bitcoin (BTC, “A-”), has been caught in a period of stagnation without significant price movement.

The trading range for BTC during this period has been notably narrow, marking the tightest range observed in months.

This follows a period of remarkable volatility and notable price gains earlier this year and has led to reduced trading opportunities and subdued market sentiment.

You can see this stagnation on the BTC/USDT 4-hour chart with BTC trading around $26,850:

Click here to see full-sized image.


At the same time, when we look at the longer time frame, we can see BTC trading just above the weekly 200-day moving average (blue):

Click here to see full-sized image.


This means we are at the decision point, one that investors have been eagerly awaiting. If BTC can hold and bounce off this support level, it will be able to stay bullish in the medium term.

Furthermore, the price action has been exhibiting a pattern of lower highs and lower lows since May 5, which is usually (but not always!) followed by a breakout on the upside.

On a macro note, the expected release of Purchasing Managers' Index data tomorrow has the potential to shake up the cryptocurrency market as well as broader markets.

PMI data provides insights into the economic health of various sectors, including manufacturing and services. Positive data indicating growth and expansion could potentially boost investor confidence and lead to increased trading activity.

As investors anticipate a shift in market dynamics, increased volatility may be on the horizon.

However, there are simultaneous concerns over dollar liquidity, stemming from the U.S. Treasury’s efforts to rebuild cash balances after resolving the debt limit situation. This may put downward pressure on Bitcoin.

Notable News, Notes & Tweets

•  Crypto lender BlockFi shared unapproved reorganization plan prematurely, according to the court.

•  A husband hid $500,000 in Bitcoin during a divorce and got busted by a crypto hunter.

•  EOS network participants should consider legal action against, a major investor.

•  Analyzing EU’s MiCA’s role in shaping global crypto regulation.

•  NEAR Foundation launches NEAR Horizon.

What’s Next

The upcoming PMI data holds the potential for increased volatility. Concurrently, concerns over dollar liquidity may put downward pressure on Bitcoin as the U.S. Treasury aims to rebuild cash balances.

As a result, investors can expect a cautious and uncertain market environment in the short term, with the potential for a breakout based on PMI data and the influence of dollar liquidity dynamics.

We’ll keep you posted with how things turn out, so keep checking back with us here as the week progresses.



About the Contributor

Marija (pronounced “Maria”) holds a bachelor’s degree in business from the London School of Economics, a master’s in banking from the University of Business Studies of Bosnia and Herzegovina, and is a PhD candidate at the same institution. She specializes in smaller, up-and-coming cryptos.

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