Key points

  • Bitcoin jumped about $1,000 on Kraken after the 13:30 UTC producer-price release, topping out at $70,190 in the 13:35 UTC five-minute bar, and was back below its pre-release price by 14:25 UTC. It was near $68,945 at 14:52 UTC, down about 3.4% from its UTC open.
  • The first level to watch is $70,000, which it held for only minutes. Below, the day’s $67,500 low, the weakest print since 19 Aug, is the line to defend.
  • A daily close back above the 200-day average, near $73,082 on our Kraken count, would undo this week’s break; a move under $67,500 would put the August lows, near $64,100 on 19 Aug, back in view.

The number was hot. The relief was short.

October producer prices rose 0.3% on the month and 6.5% from a year earlier, the Bureau of Labor Statistics said, the fastest 12-month pace since November 2022. Economists had expected a 0.4% monthly rise, CoinDesk reported.

Bitcoin traded near $69,180 on Kraken before the release and reached $70,190 by 13:35 UTC. It slipped back to $69,096 by 14:25 UTC and touched $68,811 at 14:35 UTC, about $370 under its pre-release price. It was near $68,945 at 14:52 UTC; Coinbase showed $68,788.

What the print said

The headline was softer than forecast. Underneath, it was not soft: the index excluding food, energy and trade services rose 0.5% on the month, the same as in September, and 4.9% on the year.

Put simply, producer prices measure what businesses are paid for what they sell, and they often show up later in what consumers pay. A hot one keeps the Federal Reserve’s hand on the brake.

Traders already expect that. The CME FedWatch tool showed an 88% chance of a quarter-point rate rise at the 8-9 Dec meeting and a 12% chance of half a point, CoinDesk reported at 11:52 UTC. The 10-year Treasury yield was near 5.16%, up from 5.10% on Thursday, and the dollar index was near 103.2, Yahoo Finance data showed.

Stocks barely moved. The S&P 500 was down about 0.2% and the Nasdaq about 0.5% at 14:51 UTC. Crypto stocks did worse: BlackRock’s IBIT fell about 3.3%, Strategy about 2.6% and Coinbase about 1.4%.

The pop is a timing fact, not a cause. Nothing in the data says the print drove the jump, or the fade.

Who got carried out

About $1.64 billion of crypto futures positions were liquidated over 24 hours, 88.7% of them longs, CoinDesk reported, citing CoinGlass. Bitcoin accounted for about $916 million. Here is how a liquidation works.

On Deribit, the book stayed calm: bitcoin perpetual open interest was about $694 million at 14:52 UTC, against about $687 million at 04:47 UTC. Funding was 0.0004% per eight hours there, and OKX’s last settled rate was minus 0.0064%, so shorts paid longs. Funding gives no sign of a crowd chasing the bounce.

The 08:00 UTC weekly expiry settled at $68,709.64, Deribit’s delivery price shows. The $72,000 and $70,000 puts finished in the money; the $68,000 puts did not.

Options traders are paying for protection. The one-week 25-delta skew rose to about 14%, CoinDesk reported, meaning downside puts cost more than upside calls. Deribit’s DVOL index, 30-day implied volatility, was 40.1 in the 14:00 UTC hour, little changed on the morning.

The levels

The level to watch is $70,000. It is the round number, the strike with the most open interest in next Friday’s expiry (about 1,900 BTC of puts), and the price bitcoin cleared only briefly, in the 13:35 UTC bar.

A sustained break under $67,500 would take it below the morning’s low and toward the 19 Aug low of $64,116. Above, $70,000 comes first, then the 200-day near $73,082.

The alternative read: momentum signals fail about half the time. CoinDesk’s Omkar Godbole wrote that bitcoin’s weekly MACD, a momentum gauge, has turned bearish 24 times since 2012, and in 13 of them the price fell at least 16%. This week’s signal is confirmed only if the bar is still negative at Sunday’s weekly close. In the other 11, including the most recent in June, it fell less; after that one, bitcoin dropped 3% to $57,700 and rebounded.

For the day before, see Thursday’s US-open Market Read, and for the overnight break of $70,000, this morning’s First Print.

As of 14:52 UTC, BTC is trading near $68,945 on Kraken. Not financial advice.

This article is for information only and is not investment advice.