- As markets react to January PCE data, crypto and bitcoin prices dropped.
- The Fed’s favourite inflation measure came in hot, jolting markets lower with S&P 500 declining nearly 1.4% and Dow dropping about 400 points.
- Rekt Capital crypto analyst says BTC price will remain in positive territory as long bulls keep support above $23k.
Bitcoin price continues to struggle after the rejection from the $25k resistance, but today’s dip comes as the market reacts to hotter-than-expected Personal Consumer Expenditure (PCE) data.
Stocks fell on Friday with the Dow Jones Industrial Average falling 400 points and the S&P 500 falling almost 1.5%, but the BTC price dropped below $24k to reach lows of $23,130 across all major exchanges.
CPE data causes crypto and Wall Street to drop
The CPE is the Federal Reserve’s most preferred inflation measure and sentiment has shifted on the latest data release as investor jitters fill up again.
CPE price index is used by the Fed to measure how much inflation has occurred in the US economy. Data shows that prices rose 0.6% in January, and 5.4% year over year. Also, Core CPE came in hot at 4.7% against 4.3% as expected. This indicates that inflation remains a concern.
“Inflation remains too high. We’re going to have to do more to get back to 2%,” said Cleveland Federal Reserve President Loretta Mester. “I see a little more impetus in the inflation measures than my colleagues. We’re going to have to bring interest rates above 5% and hold there for a time,” she added during an interview CNBC.
The outlook for Bitcoin prices
The reaction on Wall Street also cascaded into the crypto market, with BTC price declining below a key support line recently highlighted as a “confluent support zone.” The uncertainty around the Fed’s interest rates saw most stocks scorched in early trades, a scenario also replicated in crypto with Ethereum dropping below $1,600.
For Bitcoin’s short-term price outlook, popular crypto trader and analyst Rekt Capital says bulls could remain in control if BTC holds above $23k. A bearish outlook is possible if the price drops below $23k.
“BTC Weekly retest of the confluent area that is the Lower High and Monthly Range High resistance is now in progress. To be successful, the retest must be held at this level. However, Weekly Close below this area would be a bearish sign,” the analyst noted.
A failed #BTC A weekly retest of $23400 would indicate that the price is still within the Monthly Macro Range.
Let’s look at the Monthly Closes.
1M Close to $23400 -> possible range breakout
1M Nearly Below -> $BTC The range could drop lower, but stays within the range#Crypto #Bitcoin pic.twitter.com/xTAqH7pVlm
— Rekt Capital (@rektcapital) February 24, 2023
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