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Sunday, June 2, 2024
HomeCryptoBitcoin drops slightly 1% as US April PCE shows stable inflation

Bitcoin drops slightly 1% as US April PCE shows stable inflation

The April report on the US Federal Reserve’s (Fed) preferred inflation indicator, released this morning by the Bureau of Economic Analysis, confirmed the pace of price increases has stabilized for now in 2024.

The core personal consumption expenditures (PCE) price index, which excludes the food and energy components of the inflation measure, rose 0.24917% in April, rounded to 0.2%. That was just slightly below economists’ consensus forecast of a 0.255% gain for the month, rounded up to 0.3%.

The core PCE price index rose 0.3% in March – 0.33416% to be exact – so the drop to 0.24917% makes more sense. The year-over-year change in the core PCE price index rounded up to 2.8% in both March and April, in line with consensus expectations.

The headline PCE price index rose 0.3% in April and was up 2.7% from a year earlier – both in line with consensus forecasts.

The April PCE report will leave the Fed holding rates steady for the time being, but it does not make the situation worse and represents slow progress toward the central bank’s goals.

After falling rapidly in the second half of 2023, the decline in inflation has largely leveled off through 2024. April’s data was a continuation of that trend, but did not represent the more frightening rapid response in inflation rate.

That could shift the discussion to whether the Fed needs to continue raising interest rates to control inflation. Slowing but still solid income and spending growth in April was better news for the Fed, painting a picture of a resilient U.S. labor market and economy that is normalizing after a recession. hot over the past few years.

Fed officials have repeatedly emphasized that they need more evidence that inflation is trending toward the 2% target before changing interest rates. Friday’s news is unlikely to give them the confidence they want but will not muddy the picture further.

The next decision from the Federal Open Market Committee will take effect on June 12. Interest rate futures market prices on Friday morning imply about 99% no change in interest rates at the meeting.

Bitcoin fell more than 1% on the day after the data was released. At the time of writing, BTC is trading at $67,753.

Source: TradingView

$69,000 is still the price of life and death for Bitcoin

Keith Alan, co-founder of trading resource Material Indicators, said that $69,000 is now the key price level that Bitcoin needs to beat.

Nearly three months after its all-time high of $73,800 recorded around mid-March, BTC/USD has failed to return to those levels and price discovery continues.

Considering the seller’s liquidity position on the current order book, Alan is not surprised by this.

“There won’t be a legitimate, sustained breakout until BTC bulls can flip R/S at $69k. A monthly close above or below $69K will tell us whether the price is entering the next leg or will continue to consolidate within this range.”

BTC/USDT liquidity heat map. Source: Keith Alan/X

A day earlier, Bitcoin once again failed to maintain above the $69,000 mark amid the judge’s guilty verdict against US Presidential candidate Donald Trump.

CoinGlass data shows Bitcoin is on track to achieve its first “green” May in four years. At 12%, May 2024 would close out Bitcoin’s fifth best month of the year since 2019.

However, Bitcoin is still down in Q2 after gaining nearly 70% in the first quarter.

BTC/USD Monthly Profit. Source: CoinGlass

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Bitcoin Magazine

Mark Tyson
Mark Tyson
Freelance News Writer. Always interested in the way in which technology can change people's lives, and that is why I also advise individuals and companies when it comes to adopting all the advances in Apple devices and services.
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