Bitcoin-friendly PPI figures support bullish sentiment as Ether struggles to maintain $2,000.

Bitcoin (BTC) maintained its $30,000 support level at the Wall Street opening on April 12, as additional macroeconomic data from the United States encouraged bullish sentiment.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

PPI indicates potential further declines in inflation

Data from Cointelegraph Markets Pro and TradingView revealed that BTC/USD was trading around $30,250 on Bitstamp.

With a decrease in volatility, the U.S. Producer Price Inflation (PPI) data offered a timely indication that inflation was decreasing more rapidly than anticipated.

The headline PPI registered at 2.7% year-on-year, compared to market forecasts of 3% — a positive outcome for risk assets.

US March PPI decreased by 0.5% MoM, falling short of the 0% estimate, further suggesting that US #inflation may have reached its peak. pic.twitter.com/mfI7ab03ev

— Holger Zschaepitz (@Schuldensuehner) April 13, 2023

The Kobeissi Letter, a financial commentary outlet, noted that the month-on-month decline in PPI was the most significant since the peak in March 2022.

“The overall PPI inflation rate has dropped from 11.3% to 2.7% since June 2022, less than a year ago. Additionally, there has not been a monthly increase in PPI inflation since June 2022,” it stated.

Market analyst Tedtalksmacro remarked that these figures could create a snowball effect for another crucial inflation indicator, the Consumer Price Index (CPI), which also exceeded expectations in March.

“Suggestive of further declines in CPI/PCE in the upcoming months,” he summarized regarding the PPI results.

A quicker reduction in inflation has historically supported the performance of cryptoassets, as it raises expectations that U.S. economic policy may become less stringent.

A significant event for market participants will be the Federal Reserve’s upcoming interest rate decision, scheduled for May.

According to CME Group’s FedWatch Tool, expectations still leaned towards an additional rate hike of 0.25%, with the PPI data doing little to alter the prevailing sentiment.

Fed target rate probabilities chart. Source: CME Group

Bitcoin, Ether face challenges at critical levels

While Bitcoin sustained its $30,000 support, it struggled to assure all traders that its ten-month high would hold.

Related: Can Ethereum breach $2K? ETH price approaches closer despite new unlocked supply

Monitoring tool Material Indicators cautioned of a bearish signal on its proprietary trading systems, within a broader bullish framework.

Both Trend Precognition algorithms are indicating red on the BTC Daily chart. The signals are tentative, but both algorithms on the same candle have historically shown a high probability of accuracy, so these are the signals I’ll often act on early. Of course, PPI coming at 8:30 am might influence things… pic.twitter.com/rKguVIeS5d

— Material Indicators (@MI_Algos) April 13, 2023

A review of buy and sell levels on the Binance order book before the PPI release indicated that the strongest resistance was positioned at $30,500.

“Near-range bid liquidity may restrict downside volatility, but this is the #WildWest of #Crypto, so anything can happen. Watch for rugs,” Material Indicators noted in part of its commentary.

BTC/USD order book data (Binance). Source: Material Indicators/ Twitter

As reported by Cointelegraph, it was the largest altcoin, Ether (ETH), that captured attention on that day, surpassing $2,000 for the first time since August of the previous year.

ETH/USD 1-day candle chart (Bitstamp). Source: TradingView

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