Bitcoin threatened to reverse its early-week gains on May 14 as market volatility increased ahead of key macroeconomic data releases. Data from Cointelegraph Markets Pro and TradingView showed a dip in BTC price to $61,440 on Bitstamp, down from a high of $63,450 the previous day. This decline suggested potential risks for those holding short positions, as highlighted by trading resource Material Indicators.

Material Indicators noted that if Bitcoin could surpass $63,000, over-leveraged short positions might face significant losses. However, despite the bullish potential, momentum faltered, and a substantial amount of liquidity was removed to the downside, according to CoinGlass data. The liquidation heatmap indicated that bids were strengthening at the $60,000 and $65,000 levels, in anticipation of upcoming economic reports from the United States, specifically the Producer Price Index (PPI) and comments from Federal Reserve Chair Jerome Powell.

It’s not unusual for the order book to show protective measures ahead of significant economic events, with bids sometimes being withdrawn at the last moment. Bitcoin has consistently neutralized liquidity on both sides of the spot price while staying within a narrow range since the end of April, as Cointelegraph reported. This behavior underscores the ongoing uncertainty in the market as traders await critical data points.

Financial commentator Tedtalksmacro pointed out an unusual scenario where the PPI data is released a day before the Consumer Price Index (CPI) data for April. Typically, PPI and CPI data are highly correlated, with PPI often leading the way for CPI numbers. This setup could result in more significant market reactions if there are any unexpected deviations from the anticipated figures.

Data from CME Group’s FedWatch Tool highlighted the improbability of an imminent interest rate cut by the Federal Reserve. The chances of a 25-basis-point cut at the June meeting of the Federal Open Market Committee (FOMC) were minimal, standing at just 3.5%, with a 24.6% probability for the July meeting. This suggests that market participants should brace for substantial surprises to see any major shifts in monetary policy expectations.