Bitcoin Price Declines on Rising U.S. Inflation Data, Analysts Cautious
Bitcoin prices fell 3% following higher-than-expected U.S. PCE inflation data, dipping below $84,500 for the first time since March 23. While some traders remain hopeful about a bullish trend, analysts express caution regarding potential stagflation and highlight the importance of March inflation figures in shaping future market movements.
On March 28, Bitcoin (BTCUSD) experienced a decline of 3% in response to unexpectedly high U.S. inflation data. Initially, Bitcoin had approached $85,500 as markets opened, only to reverse and hit lows below $84,500 on Bitstamp. This represented its lowest point since March 23, as market participants reacted to the U.S. Personal Consumption Expenditures (PCE) Index showing inflation increasing compared to previous months.
Although the month-over-month and year-over-year PCE figures aligned with market expectations at 0.3% and 2.5%, respectively, core PCE metrics exceeded predictions by 0.1%. The Kobeissi Letter remarked, “Core inflation is back on the rise,” highlighting that January’s data had also been revised upwards. The publication warned of a macroeconomic environment fostering potential stagflation by 2025, particularly as they anticipate March’s inflation data to reveal further insights amid ongoing trade conflicts.
Despite the inflation concerns, Bitcoin’s market response remained volatile, with traders braced for potential shifts. Daan Crypto Trades noted that the release of PCE data would likely incite market fluctuations. Some analysts, including Michaël van de Poppe, expressed cautious optimism, stating, “Trend remains to be upwards for $BTC, but it starts to look slightly less good,” indicating that while prices have hovered above $80,000 for weeks, uncertainties prevail. Fellow trader TheKingfisher shared concerns about a full bullish recovery being unlikely in the near term, suggesting that current price movements do not support sustained upward momentum. This article is not intended as investment advice; readers are encouraged to conduct thorough research on their own before making investment decisions.
In conclusion, Bitcoin’s recent price drop amid rising U.S. inflation reflects market apprehension regarding macroeconomic conditions. Despite previous upward trends, analysts express caution about Bitcoin’s future performance, emphasizing the potential for volatility in the crypto market. Key insights suggest that unless support at $84,000 holds, further declines may be anticipated, with March inflation data likely to significantly influence market trajectories.
Original Source: www.tradingview.com
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