Thursday, 2 February 2023

Crypto News

Bitcoin price gains 3.5% as US PCE data supports shrinking inflation

Bitcoin price gains 3.5% as US PCE data supports shrinking inflation

Bitcoin (BTC) rose rapidly later on Aug. 26 as fresh economic data from the United States furthered hopes of a pivot from the Federal Reserve.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Bitcoin bounces but preserves intraday trend

Data from Cointelegraph Markets Pro and TradingView tracked a 3.55% rise for BTC/USD on the day, allowing the pair to match highs from earlier in the week.

The move marked a surprise about turn for Bitcoin, which hours before had seen selling pressure as markets awaited cues from Fed Chair Jerome Powell’s Jackson Hole symposium speech.

With that speech still to come at the time of writing, bullish catalyst came in the form of the latest Personal Consumption Expenditures Price Index (PCE) readout, which was lower than expected.

Analysts reacted positively, as the numbers added weight to the idea that U.S. inflation had already peaked — a narrative already supported by the Consumer Price Index (CPI).

Caleb Franzen, senior market analyst at Cubic Analytics, nonetheless noted that the hourly structure on BTC/USD remained in place despite the uptick. Bitcoin traded in a range unchallenged since the Aug. 19 drop from higher levels.

Analyst Kevin Svenson was equally conservative in his view of the potential knock-on effects for Bitcoin.

“PCE data is bullish. FED uses that data, so now speculators are betting up,” he explained.

“But if Powell stays the course then we could easily dump back down, so just be cautious. Kind of a coin flip now.”

At the time of writing, BTC/USD traded at around $21,500, a key area containing Bitcoin’s realized price.

“Most participants” in Bitcoin are asleep

Analyzing longer-term trends, meanwhile, BlockTrends analyst Caue Oliveira had some bad news for those hoping for a more seismic return to form for BTC price action.

Related: CME Bitcoin futures see record discount amid ‘very bearish sentiment’

Network usage, he noted…

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