Crypto Market In The Red With PCE Data News; End Of Rally For Now?
Crypto News Today: Crypto prices and the US stock futures dropped in response to the news of stronger than expected rise in prices in January 2023. The core personal consumption expenditure (PCE) price index is key to the Federal Reserve‘s estimation of inflation rate in the US economy. In line with the views of the Fed’s Board of Governors that the ongoing interest rate hikes are appropriate, the PCE index for January rose 0.6%. Hence, the cryptocurrency market reacted bearishly to the hot PCE inflation numbers over fears of more rate hikes in coming months.
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The Dow Jones futures fell by 1.4% while the S&P 500 and Nasdaq futures too dropped sharply after the release of the price rise data. Even Bitcoin (BTC) price fell sharply in reaction to the news, with a dip of around 1%.
Bearish Or Bullish For Crypto?
The US Commerce Department reported that personal consumption expenditures excluding food and energy increased 0.6% in January, and was up 4.7% from a year ago. The market expectation for the PCE index was for a reading of 0.5% rise in January.
In the wake of recent macro announcements, the BTC price has been in close correlation with S&P 5oo Index, which is dominated by the technology stocks. This explains the crypto market reaction to PCE inflation data. However, trends from the peak bear market in 2022 showed crypto prices recovering to bullish recovery after important macro announcements like the Fed’s rate hike. Hence, the current scenario could perhaps be a case of bear trap leading to the weekend.
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