Bitcoin Price Skyrockets to $67,900; Mixed US Inflation Data & Fed Rate Cut Hopes Drive Rally
Bitcoin (BTC) continues its upward surge, reaching a staggering $67,900. The Core PCE Price Index, the Federal Reserve’s preferred inflation measure, rose by 0.2% month-over-month in April, meeting expectations but falling slightly below the previous month’s 0.3% increase. While this modest rise may alleviate some inflation concerns for the Fed, consistent readings are necessary to support the possibility of a rate cut by September.
On the other hand, the Chicago PMI dropped to 35.4, below the expected 41.1, indicating weaker manufacturing activity. These mixed data points paint a complex economic picture, with inflation showing signs of easing but economic activity slowing down. Despite this, the Bitcoin price prediction remains bullish.
US Inflation Data and the Potential for a Fed Rate Cut
Bitcoin (BTC) maintains its upward momentum, surging to approximately $67,900. The Core PCE Price Index, which measures inflation, increased by 0.2% in April, meeting expectations but falling short of the previous month’s 0.3% rise.
While this slight increase may alleviate some inflation concerns for the Fed, consistent readings are required to support the possibility of a rate cut by September.
Core PCE Price Index m/m:
0.2% (expected 0.3%)
Chicago PMI:
35.4 (previous 37.9)
The Chicago PMI, a measure of manufacturing activity, fell to 35.4, below the expected 41.1. This indicates weaker manufacturing activity. These data points suggest a mixed economic outlook, with signs of easing inflation but a slowdown in economic activity.
These data have an impact on the Bitcoin price as the likelihood of a Fed rate cut by September increases if inflation continues to moderate. This, in turn, could weaken the US dollar and support BTC price gains.
Disappointing US GDP Data Supports Bitcoin Price
The surge in BTC price is also largely due to the weakening of the US dollar, following disappointing US GDP data. The lower-than-expected GDP figures have led traders to anticipate a rate cut by the Federal Reserve this year, putting pressure on the dollar and boosting BTC.
Key Points:
– Chicago Fed President Austan Goolsbee expresses concerns about housing inflation and a robust labor market.
– Atlanta Fed President Raphael Bostic suggests that a rate cut in July is unlikely due to slow progress in inflation.
– New York Fed President John Williams is optimistic that inflation will ease later this year.
US economic data reveals that GDP grew at an annualized rate of 1.3% in Q1, down from the previous 1.6% but in line with expectations.
Additionally, US weekly Initial Jobless Claims increased slightly to 219K, above the market consensus of 218K. These factors, combined with expectations of a Fed rate cut, have strengthened Bitcoin’s appeal.
Bitcoin Price Volatility Influenced by Mixed Sentiments in the Spot Bitcoin ETF Market
The Spot Bitcoin ETF market experienced mixed investor sentiments on May 30, 2024, with total investments amounting to $48.71 million.
Notably, Blackrock’s iShares saw a modest inflow of $2 million, while Fidelity experienced a significant inflow of $119 million, indicating strong investor trust. Bitwise also attracted $26 million, reflecting growing confidence in its offerings.
Key Points:
– Blackrock’s iShares: $2 million inflow
– Fidelity: $119 million inflow
– Bitwise: $26 million inflow
– ArkShares: $100 million withdrawal
– Invesco: $2 million inflow
However, ArkShares faced a substantial withdrawal of $100 million, suggesting potential shifts in investor sentiment. Invesco maintained steady interest with a $2 million inflow.
Meanwhile, WisdomTree, Grayscale, Franklin, Valkyrie, and VanEck did not see any new investments, likely due to competitive pressures and evolving investor preferences.
These mixed investment flows in the Spot Bitcoin ETF market indicate varied investor sentiment, which could lead to increased volatility in BTC price. Strong inflows boost market confidence, while significant withdrawals create uncertainty, influencing the dynamics of Bitcoin’s price.
Bitcoin (BTC/USD) Technical Outlook: June 1, 2024
Bitcoin (BTC/USD) is currently trading at around $67,900, experiencing a slight increase of approximately 0.25%.
The green pivot point is set at $68,100 and serves as a critical indicator for potential market direction. Immediate resistance levels are positioned at $68,800, $69,800, and $70,600.
On the downside, immediate support can be found at $67,500, with further support at $66,600 and $65,900.
Technical indicators show the Relative Strength Index (RSI) at 46.94, suggesting a neutral to bearish sentiment.
Additionally, the 50-day Exponential Moving Average (EMA) aligns with the pivot point at $68,100, indicating this level as a significant dynamic support.
The outlook for Bitcoin remains bearish below the pivot point of $68,100. A breach below the immediate support at $67,500 could lead to further declines, while a break above $68,800 may shift the sentiment towards a bullish bias, aiming for higher resistance levels.
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