Chief commodity strategist at Bloomberg Mike McGlone has taken to Twitter to comment on the rapid fall of the Producer Price Index (PPI) this year.
Bloomberg's chief expert expects Bitcoin to keep dropping
McGlone mentioned that on May 8, the released PPI data showed another decline of the Producer Price Index this year, 1.4%, saying that PPI "is falling at the fastest pace in history since 1948."
He also stated that "Bitcoin could help provide guidance on the outlook for further declines."
As a rule, Bitcoin reacts positively to CPI and PPI values going down. However, so far, the leading cryptocurrency remains in the red, falling by 1.09% in the past 24 hours, trading at $27,649, according to data provided by CoinMarketCap.
In an earlier tweet, McGlone said that he expects BTC to lead risk assets lower if the current price decline of these commodities is not yet over. This is likely attributed to the recent rate hike by the Federal Reserve.
Major analyst says Bitcoin may sweep lower again
Prominent crypto trader and analyst Michael van de Poppe has shared a similar forecast on the biggest cryptocurrency by market cap. The $27,800 level has turned into resistance now, he pointed out.
He expects Bitcoin to sweep lower and, after that, "we are ready to long our longs in anticipation of CPI." He also expects a bullish divergence to appear soon on the Bitcoin chart.
#Bitcoin still trending downwards, as $27,800 now becomes resistance.— Michaël van de Poppe (@CryptoMichNL) May 9, 2023
I'm expecting a sweep lower again, and then we're ready to long your longs in anticipation of CPI.
Need a bullish divergence as well, but we're getting there. pic.twitter.com/eUkq9XLlxx
On May 8, Poppe stressed in a tweet that Bitcoin had hit $27,400, still trending down. The $26,800 area was what Bitcoin may test next, according to the analyst, and these are the potential zones for longs, depending on the upcoming CPI data to be released on May 10.