Macroeconomic Data as a Key Factor in Bitcoin Price
Bitcoin hit $72,000, but strong U.S. economic data pushed prices lower. Bitcoin prices posted a 2% decline, falling below the $68,500 support to trade at $67,900.
Bitcoin (BTC) hit a record high of $72,000 this week. The price was boosted by the launch of an Ethereum ETF in the United States. Unfortunately, the rally didn’t last long. Strong U.S. economic data sent prices tumbling.
Bitcoin’s rise to $72,000 was a significant achievement. However, U.S. economic data had a negative impact on the market. Hopes that the Federal Reserve (Fed) will lower interest rates have diminished due to increased confidence in the stability of the U.S. economy. This in turn affected the price of bitcoin.
This Week’s Top Dates to Watch for
Thursday: New estimates of U.S. economic growth for the second quarter of 2024 are due. If the data is worse than expected, it could put pressure on inflation and force the Federal Reserve to cut interest rates more quickly.
Weekly jobless claims will also be released. A higher number of claims could indicate problems in the labor market, which could lead the Fed to adopt a more accommodative stance.
Friday: The focus will be on the PCE price index, the favorite inflation indicator of the US central bank. After last week’s positive CPI report, investors will be watching closely to see if the inflation numbers will come in lower. A low rate of inflation could potentially contribute to higher bitcoin prices.
Bitcoin prices are heavily influenced by macroeconomic data. A worse economic performance could increase the pressure on the Federal Reserve to lower interest rates, which is usually a good thing for the price of cryptocurrencies. The elevated number of jobless claims suggests poor labor market conditions, which may also lead the Federal Reserve to adopt a more accommodative monetary policy.
The PCE price index is a key inflation indicator monitored by the Federal Reserve. Its value has a direct impact on monetary policy decisions. High inflation can lead to interest rate hikes, which is often negative for bitcoin. On the other hand, low inflation can help cryptocurrency prices rise.
BTC Price Reaction
Both the total crypto market capitalization (TOTALCAP) and Bitcoin (BTC) fell victim to Mt. Gox’s $5 billion move. Given that the move was the driver of today’s market, the Bitcoin price was bound to take a hit.
The cryptocurrency’s drop was just over 2%, with BTC losing support at $68,500. This is a critical support level. In order to notice a recovery, cementing it as a support floor is essential.
Although a larger drop is unexpected, unprecedented bearish conditions could drag BTC down to $66,000. However, a return to the $68,500 level as support could be the catalyst for optimism.
CryptoPredictions’ BTC Forecast
BTC started May 2024 at $135.300 and is forecast to end the month at $69,296.314. During the month of May, the maximum predicted price of BTC is $68,302.039 and the minimum predicted price is $135.300.
Bitcoin is predicted to start June 2024 at $66,292.129 and end the month at $51,473.639. During the month of June, the maximum forecast price for BTC is $68,342.401 and the minimum price is $46,472.833.
Today’s (05/28/2024) BTC price range is predicted to be $56,609.085 – $83,248.655. Bitcoin is predicted to end today at $66,598.924.
By Leonardo Perez