Why is Bitcoin price up today?

Bitcoin (BTC) price moved higher after the Wall Street open on Sept. 12 as fresh macroeconomic data from the United States triggered a risk-on sentiment across the wider crypto market. 

Data from Cointelegraph Markets Pro and TradingView showed that Bitcoin rose from an opening of $57,335 on Sept. 12, rising as much as 2.15% to an intra-day high of 58,560. At the time of publication, Bitcoin was trading at $58,069, up 3.6% over the last 24 hours.

Let’s look at the factors driving Bitcoin price up today.

Bitcoin responds to mixed PPI and Jobs Claims data from US

After the Sept. 11 Consumer Price Index (CPI) print revealed a slowdown in inflation on a year-over-year basis, Bitcoin responded positively to the Producer Price Index (PPI) data which was released on Sept. 12.

The August PPI data showed a month-on-month increase of 0.3%, slightly beyond expectations, while its year-on-year equivalent was lower than anticipated at 2.4%. 

However, market participants focused more attention on unemployment numbers, which also came in hot at 230,750 versus the expected 227,000.

For several weeks now, the market has gone ahead of itself, betting on a 50 basis points (bps) rate cut at the Sept. 18 FOMC meeting, and this week’s macroeconomic data has reduced the chances of a 0.5% cut to below 15%, down from 40% earlier last week. 

Capital markets commentator The Kobeissi Letter still maintained that the Federal Reserve should cut interest rates by 0.25% at its next FOMC meeting.

Data from the CME Group’s FedWatch tool corroborated this, showing futures markets pricing in 87% odds of a 0.25% cut during the Sept. 18 Fed meeting.

$20 million short Bitcoin liquidations back BTC’s upside

The liquidation of short positions versus long ones further fueled Bitcoin’s upward performance on Sept. 12.

Notably, the Bitcoin derivatives market has witnessed approximately $27.39 million worth of liquidations in the last 24 hours, out of which $19.97 million were short. When short positions are liquidated, it generally involves buying the asset (voluntarily or by the broker), which can drive the price further up.

Meanwhile, Bitcoin’s open interest (OI) has risen from $28.30 billion on Sept. 8 to around $30.02 billion on Sept. 12.

Additionally, Bitcoin’s funding rate has flipped positive and now stands at 0.0483% per week, showing that longs are now ready to pay shorts to keep their positions open. Still, the funding rate has climbed significantly compared to the Aug. 17 low of over -0.1365% per week.

The sharp rise in the funding rate and an increase in open interest suggest an increase in speculative trading or an increase in overall market confidence.

It could also reflect a shift in trader expectations about future price movements, possibly anticipating high volatility or strong upward price movements.

Related: Bitcoin whale transactions see ‘noticeable’ drop since March price peak

Bitcoin price finds support from the lower trendline of a falling channel 

From a technical perspective, Bitcoin’s gains today are part of a rebound that started after the price tested the lower trendline of its prevailing descending channel pattern as support on Sept. 6.

The price now has room to rally toward the resistance confluence comprising its 50-day (yellow) and 200-day (purpose) exponential moving averages (EMA) at around $59,500. Nevertheless, these EMAs may soon form a death cross.

A death cross is a bearish chart pattern where a short-term moving average crosses below a long-term moving average, signaling potential further downside. If it plays out as intended, BTC’s probability of wiping its recent gains while retesting the channel’s lower trendline—at around $50,600—will likely increase in the second half of September.

On the upside, a breakout above the 50-200 EMA confluence will likely push the Bitcoin price toward the channel’s upper trendline at around $68,250 over the next few weeks. The bullish divergence from the relative strength index supports this positive outlook.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.