Bitcoin nears $27,000 despite ‘hot’ PCE data that fueled bets on June rate hikes

Bitcoin Shrugs New Inflation Problems In The US

Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD on Bitstamp was approaching $27,000.

The pair rose unexpectedly after the day’s personal consumption expenditure (PCE) data showed the first increases since October 2022.

Such a reading should provide a headwind for risky assets, including crypto, as it implies inflation remains stubborn and more financial tightening may be needed to tame it.

“This is a major setback in the Fed’s fight against inflation,” said The Kobeissi Letter, financial commentary source. wrote part of a response.

Kobeissi noted that expectations for rate hikes by the Federal Reserve “changed rapidly” thanks to the PCE event.

According to the CME Group’s FedWatch Tool, the market is now narrowly in favor of another rate hike in June, while previously it was more than 80% certain that a pause would come.

Financial commentator Tedtalksmacro, meanwhile, acknowledged that PCE gains were relative.

“US PCE data came in well, above analysts’ expectations. However, on a 3-month annualized basis, core PCE printed sharply lower… to 4.2%. responded.

Traders’ relief, meanwhile, was accompanying news that the Biden administration was closing in on a debt ceiling deal, with the deadline now just days away.

The S&P 500 and Nasdaq Composite Index were up 1% and 1.65% respectively at the time of writing.

DXY hits peaks in 10 weeks

Michaël van de Poppe, founder and CEO of trading firm Eight, turned to Bitcoin itself and signaled the potential for upward continuation.

Related: Bitcoin Loses Its 200-Week Trendline And Brings $20K Into Play – BTC Price Analysis

“That is step one for Bitcoin as we reclaim $26,600 and look to continue moving toward the top ranks,” he said. noticed on the price action of the day.

“If the recent correction is an anomaly, we could break through to $29,000 next week.”

He warned that PCE was “not a good sign” for risky assets, pointing to the knee-jerk response to US dollar strength – traditionally inversely correlated with crypto.

The US dollar index (DXY) reached 104.4 that day, its highest level since March 17.

“Some consolidation after this month’s rally would be healthy for the dollar,” popular trader Justin Bennett wrote in a special forecast.

“But a daily and weekly close above 104.20 opens 105.00 early next week. The only thing that would make me bearish on the DXY is a daily close below 103.50.

Bitcoin (BTC) posted rapid gains at the Wall Street open on May 26 as United States macroeconomic data delivered a nasty surprise.

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This article does not contain any investment advice or recommendations. Every investment and trading move involves risk and readers should do their own research when making a decision.