Bitcoin price is trading within a stagnant trend and consolidating below $20K for over a month, failing to breach these levels. Moreover, the volatility has squeezed to its maximum in the past couple of days due to which the price is not able to rise above $16,900 too. The RSI also sliced through the lower trend line and was unable to regain the levels. In the meantime, the market participants speculate a substantial uptick any time from now.
After the Consumer Price Index (CPI) and FOMC rates, the markets may get a significant boost with Core Personal Consumption (PCE) expected to be better than before. BTC price nowadays depends heavily on macro data and the decision of the US Federal Reserve.
After the recent CPI data did not impact the markets as expected, which was largely neglected by the FED chair Jeremy Powell. The speculations of the ransomware attack on Haver Analytics are hovering around and hence this may be the major reason for their negligence.
A popular analyst from Funstart writes,
“We think core PCE inflation will be 0.26% compared to the Cleveland Fed inflation now forecast at 0.10%. Any figure below 0.4% will make the #FOMC figure of 4.8% too high.
“If tomorrow’s core PCE is 4.5% or lower (~75% chance), the entire hawkish FOMC repricing is blown out – no way 4.8% core PCE in December, SEP/Dots repriced and terminals rate tumbles,”
How can this affect the price of Bitcoin (BTC)?
PCE rates are considered to be beneficial to the crypto space and for this to happen, rates have to be lower than Fed expectations which can completely erase the bearish sentiment. This could make the Fed appear to be well under control, forcing the Fed to revise its forecasts and take a more accommodative stance in upcoming meetings.
If the PCE rates are less than expectations, it may weaken the dollar strength which may ring the alarm signals for the star crypto. Presently, the BTC price is trading around $16,800 at the moment. If the price is able to rise beyond $17,000 it may spike high to test $17,400 else drop towards the support at around $16,400.
