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Highlights
- Annual PCE inflation cools to 2.4% from last month's 2.6%, in line with market estimates
- Stronger-than-expected PCE could have reduce bets for a Fed rate cut in the first half of the year
- Bitcoin traders expects BTC price to rally past $64,000 after PCE data
Crypto traders got clear cues from the latest personal consumption expenditures (PCE) inflation data, allowing Bitcoin (BTC) price to gain above $63,000. The U.S. Bureau of Economic Analysis released the U.S. Federal Reserve’s (Fed) preferred inflation gauge PCE. The data is crucial because of the recent hotter-than-expected CPI that pulled Fed rate cuts off the table.
Wall Street giants including JPMorgan, Bank of America, UBS, Morgan Stanley, Citigroup, Deutsche Bank, Nomura, RBC, Barclays, Goldman Sachs, TD Securities, and Wells Fargo remained split on PCE after the CPI scare, but most anticipated inflation to cool further.
The annual PCE inflation is further cool to 2.4% from last month’s 2.6%, with the monthly rate seen rising 0.3%. Also, the Core PCE, the Fed’s preferred gauge to measure inflation, rise 0.4% month-on-month while the annual rate cool to 2.8%, from last month’s 2.9%. Both inflation data comes in line with market estimates
Also Read: Bitcoin (BTC) Price Faces Rejection At $64,000 As US Govt. Moves $1 Billion in BTC
Fed Rate Cuts in September or June?
Fed Chair Jerome Powell called for three rate cuts in 2024 while Fed officials remain cautious after CPI, experts predicted rate cuts are starting in September. The market currently has a 65% chance of Fed rate cuts in June, with March and May off the table. Moreover, the CME FedWatch shows a 54% probability of a 25 bps rate cut in June.
The US dollar index (DXY) moves around 103.8 on Thursday after facing heightened volatility in the previous session. A stronger-than-expected PCE could reduce bets for a rate cut in the first half even further, potentially lifting the dollar and impacting Bitcoin price.
Moreover, US 10-Year Treasury yields (US10Y) pares gains after PCE, as per CNBC. Bitcoin price moves in the opposite direction to US treasury yield.
Also Read: MicroStrategy’s Bitcoin Bet Unlocks Massive Shareholder Value, MSTR at $1000
Bitcoin Price to Face Resistance or ATH Next?
Popular analyst Michael van de Poppe recommends going for longs between $46K-$53K if a correction happens. Matrixport warns investors of a potential 15% market correction following Bitcoin’s recent surge past $60,000, despite no major resistance before ATH level of $68.7K.
Spot Bitcoin ETF and FOMO are driving the rally, with Bitcoin ETFs recording the largest inflow of $673 million on Wednesday.
BTC price skyrocketed over $63,000, less than 9% away from the $68.7K. The 24-hour low and high are $57,093 and $63,913, respectively. Furthermore, the trading volume has increased by 150% in the last 24 hours, indicating a rise in interest among traders.
Futures and options open interests (OI) rose to record levels, with total options OI rising over 8% to $33.79 billion, as per Coinglass data. FOMO continues to push Bitcoin price to $100K prediction by multiple experts despite sky-high funding rates.
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