Bitcoin: Shaky ahead of PCE inflation data

May 29, 2024

By ForexTime 

  • Bitcoin ↑ 14 month-to-date
  • Could be rocked by US inflation data
  • Over past year PCE triggered moves of ↑ 1% & ↓ 2.3%
  • Technical levels – $70,000 & $67,000
  • Keep eye on Ethereum, Solana & Litecoin among others

The past few days have been volatile for the world’s largest cryptocurrency.

Bitcoin initially rallied above $70,000 last week due to market optimism around the prospect of spot Ethereum ETFs. However, prices crashed below $67,000 just hours before the SEC’s actual approval. Although bulls returned to the scene, upside gains were capped by fresh developments concerning the failed Mt. Gox exchange.

Still, Bitcoin could be in store for another wild ride this week thanks to the incoming US PCE inflation data.

All eyes will be on the Fed’s preferred inflation gauge – the core personal consumption expenditure index which could impact bets around when the Fed will cut interest rates.

As of writing, traders are currently pricing in a 74% probability of a 25 basis point Fed cut in November with a move fully priced in by December.

Note: In general, cryptocurrencies are indirectly affected by interest rates because of their high risk.


Free Reports:

Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.





Download Our Metatrader 4 Indicators – Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter





So essentially, high interest rates may sap appetite for riskier investments like crypto, and vice versa.

Fun fact: Over the past year, the US PCE report has sparked upside moves of as much as 1% or declines of 2.3% in a 6-hour window post-release.

Just like Bitcoin, here is how these other cryptos have reacted post-release…

Ethereum: ↑ 1% or ↓ 2%

Solana: ↑ 2.4 % or ↓ 2.8%

Ripple: ↑ 1.3 % or ↓ 2%

Dogecoin: ↑ 1.5 % or ↓ 2.7%

Litecoin: ↑ 3.6 % or ↓ 3.5%

Note: Past price movements do not guarantee future results but can be used to highlight how cryptos have reacted to the US PCE deflators.

Looking at the bigger picture, Bitcoin is up roughly 14% this month and still boasting year-to-date gains over 60%.

Prices remain trapped within a range on the weekly charts with support at $60,000 and resistance at $72,000.

Despite the choppiness on the daily charts, prices are still respecting a bullish channel with technical indicators signalling further upside. The candlesticks are trading above the 50, 100 and 200-day SMA while the MACD points above zero but bears seem to be eyeing $67,000.

  • A solid breakout above $70,000 may open a path toward $72,000.

  • Should prices slip below $67,000 this could open a path toward $65,000.


Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

InvestMacro

Share
Published by
InvestMacro

Recent Posts

US Dollar Index Speculator bets rise for 1st time in 7 weeks, AUD bets plunge

By InvestMacro Here are the latest charts and statistics for the Commitment of Traders (COT)…

10 hours ago

Speculator Extremes: New Zealand Dollar, Euro & CAD lead Bearish Positions

By InvestMacro  The latest update for the weekly Commitment of Traders (COT) report was released…

2 days ago

COT Bonds Charts: Speculator Bets led by SOFR 3-Months & 10-Year Bonds

By InvestMacro Here are the latest charts and statistics for the Commitment of Traders (COT)…

2 days ago

COT Metals Charts: Speculator Bets led lower by Gold, Copper & Palladium

By InvestMacro Here are the latest charts and statistics for the Commitment of Traders (COT)…

2 days ago

COT Soft Commodities Charts: Speculator Bets led by Live Cattle, Lean Hogs & Coffee

By InvestMacro Here are the latest charts and statistics for the Commitment of Traders (COT)…

2 days ago

COT Stock Market Charts: Speculator Bets led by S&P500 & Russell-2000

By InvestMacro Here are the latest charts and statistics for the Commitment of Traders (COT)…

2 days ago

This website uses cookies.