- Bitcoin price drops below $26,400 as US core PCE inflation rate came at 0.4% MoM and 4.7% YoY.
- The core PCE numbers support the idea that inflation is sticky and risk assets like Bitcoin and Ethereum could nosedive in 2023.
- The April 2023 PCE release could keep the pressure on the US Federal Reserve to raise interest rates.
Bitcoin price declined in response to April's US core Personal Consumption Expenditures (PCE) inflation data, which came higher than anticipated. The knee-jerk reaction from market participants increased the selling pressure on the asset, pushing it below $26,400. However, Bitcoin price has managed to return to pre-data levels minutes after the release.
Core PCE numbers support the thesis of “sticky inflation” and this increases the likelihood of further rate hikes by the US Federal Reserve.
Also read: Breaking: US Core PCE inflation rises to 4.7% vs. 4.6% expected
Bitcoin price drops in response to US core PCE inflation numbers
As of last week, market participants anticipated rate cuts by the US Federal Reserve. The US core PCE inflation rate came in hotter than expected, at 0.4% MoM and 4.7% YoY, boosting expectations of a looming interest rate hike.
Bitcoin’s rally to its bullish target of $30,000 is likely to be delayed as the selling pressure on the asset climbs. The trading environment is not as conducive to risk assets as traders expected and tighter market conditions could further intensify selling in Bitcoin and Ethereum.
Bitcoin price is currently in a downward trend, and the release of the US PCE inflation data has pushed the asset lower. BTC could find support at $26,348 and $26,220, two levels that acted as contention for the asset previously.
BTC price is currently below its three long-term Exponential Moving Averages 10, 50 and 200-day at $26,446, $26,440, and $26,473 respectively.
Bitcoin/ US Dollar 15-minute price chart
Investors are likely to rotate capital to alternate sectors and head back to safe havens as there is no sign of inflation easing in the short term. If Bitcoin and Ethereum prices observe gains, they are likely to be short-lived, before a longer, more significant drawdown puts risk assets to the test.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Bitcoin Weekly Forecast: BTC nosedives below $95,000 as spot ETFs record highest daily outflow since launch
Bitcoin price continues to edge down, trading below $95,000 on Friday after declining more than 9% this week. Bitcoin US spot ETFs recorded the highest single-day outflow on Thursday since their launch in January.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Solana Price Forecast: SOL’s technical outlook and on-chain metrics hint at a double-digit correction
Solana (SOL) price trades in red below $194 on Friday after declining more than 13% this week. The recent downturn has led to $38 million in total liquidations, with over $33 million coming from long positions.
SEC approves Hashdex and Franklin Templeton's combined Bitcoin and Ethereum crypto index ETFs
The SEC approved Hashdex's proposal for a crypto index ETF. The ETF currently features Bitcoin and Ethereum, with possible additions in the future. The agency also approved Franklin Templeton's amendment to its Cboe BZX for a crypto index ETF.
Bitcoin: 2025 outlook brightens on expectations of US pro-crypto policy
Bitcoin (BTC) price has surged more than 140% in 2024, reaching the $100K milestone in early December. The rally was driven by the launch of Bitcoin Spot Exchange Traded Funds (ETFs) in January and the reduced supply following the fourth halving event in April.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.