- 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
Is Altcoin Season here as Bitcoin reaches a new all-time high?
Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.
Shanghai court confirms legal recognition of crypto ownership
A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
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.