Bitcoin price holds above $63,000 even as regulatory enforcement ramps up and spot BTC ETF outflows raise concern.
Bitcoin eyes best November since 2020 as PCE fails to move BTC price
Bitcoin remains on track to seal its highest monthly close since May 2022, but BTC price is stubbornly rangebound.
BTC price shrugs off strong PCE data as Bitcoin traders eye $28K range
Bitcoin traders expect downside as BTC price offers a muted reaction to the Fed’s “preferred” inflation metric.
Crunching The Data: Will Bitcoin Price Soar Or Slump In The Coming Days?
The Bitcoin price is currently in an uncertain situation. After BTC broke below the one-month trading range between $29.800 and $31.500, the bulls have so far failed to recapture this area. A first attempt failed on Wednesday at $29.725, a second effort on Thursday at $29.600.
On the other hand, the bears currently also fail to push the price below the critical support at $29.000. In which direction the next movement will go is, as always, pure speculation, but data can give indications.
Bullish Signal 1: Decreasing BTC Supply On Exchanges
Renowned crypto analyst Ali Martinez shared an intriguing bullish chart, revealing that only 2.25 million BTC are currently held in known crypto exchange wallets. This is the lowest Bitcoin supply on trading platforms since January 2018.
The data suggests that investors and long-term holders are refraining from selling and are instead choosing to keep their BTC off exchanges. This “hodling” behavior indicates a positive sentiment BTC holders.
Bullish Signal 2: Lack Of Inflows From Bitcoin Whales
Head of Research at CryptoQuant, Julio Moreno, pointed out another bullish sign when he shared a chart showing a lack of inflows from large investors with 1,000 to 10,000 BTC (aka Bitcoin whales) into exchanges. Moreno stated, “”Not really seeing Bitcoin whale inflows into exchanges.”
Additionally, the same trend is observed among smaller investors, indicating a reluctance to deposit BTC into centralized exchanges. Commenting on the exchange deposit transactions (7-day SMA) chart, Moreno added, “indeed, seems nobody wants to deposit into centralized exchanges.”
Such behavior suggests that significant holders and institutions are holding onto their BTC assets, potentially anticipating future price increases.
Bearish Signal: Short-Term Holder (STH) MVRV Metric
On-chain analyst Axel Adler Jr. addressed the short-term holder (STH) MVRV metric, saying: “STH MVRV is actively falling and we may see something similar to what happened in the two previous corrections.” The chart shown by Adler reveals that the STH MVRV fell either close to 0 or even below during the lows of the sharp Bitcoin price corrections in mid-March and mid-June.
Currently, the STH MVRV is still somewhat elevated, so a last pullback in the Bitcoin price triggered by short term holder selling may be necessary for the MVRV to reset to 0.
Adler also remarked that there isn’t a substantial Inflow to futures exchanges at the moment like there was in March and June. “Don’t expect a sharp breakthrough upwards or downwards,” added Adler.
BTC Binance Spot Liquidity Analysis
Analyst @52kskew shared a comprehensive analysis of BTC Binance spot liquidity, highlighting an interesting observation. The bid liquidity (bids > asks) and spot asks moved lower towards price due to low volatility. He added, “note the difference in volume leading to previous selloff & current falling volume & minimal decline.”
Given the bid liquidity between $29,000 and $28,500, this area could be the point for buyers to step in if BTC experiences a pullback. In a bullish scenario, spot buying would occur in this area, followed by a rotation out of shorts. New longs get opened and price migrates towards spot supply near $30,000. In a sell off scenario, price grinds through spot bid liquidity and forced selling occurs, says Skew.
Potential Impact of Economic Data On Bitcoin
In addition, it is crucial to keep an eye on macroeconomic factors that could influence Bitcoin’s price. The release of the Personal Consumption Expenditures Price Index (PCE) at 8:30 am EST today is of particular importance.
During Wednesday’s FOMC press conference, Fed Chairman Jerome Powell stressed the importance of core inflation, which is proving sticky. Therefore, the Core PCE in particular, needs to continue falling to alleviate the Fed’s inflation concerns. If the 4.2% expectation for core PCE is exceeded, a bullish reaction from Bitcoin can be expected.
At press time, the Bitcoin price stood at $29,210.
Crypto Catalysts: Likely Rate Hike on the Menu as FOMC Begins Latest Monetary Policy Deliberations
The U.S. central bank has been telegraphing its intent in the weeks after halting rate increases last month for the first time in over a year. ThePersonal Consumption Expenditures report arrives Friday, but cryptos and other risk-on assets have been largely immune to macro events.
This bearish technical pattern hints at a double-digit drop in Bitcoin price
Inflation concerns and the U.S. debt standoff cast a long shadow over Bitcoin’s dwindling bullish prospects.
Bitcoin Holds At $29,300 As PCE Comes Out Neutral
With today’s release of the Personal Consumption Expenditure (PCE) price index by the Bureau of Economic Analysis, the Bitcoin market just experienced the most important macro event of the week. Ahead of the Federal Open Market Committee (FOMC) of the US Federal Reserve (Fed) on May 2-3, all eyes were on the PCE today.
The latter is known as the Fed’s favorite inflation gauge. (versus CPI). It measures prices paid by consumers for domestic purchases of goods and services and excludes food and energy.
The baseline was as follows: February’s core PCE index was +0.3% on a monthly basis, below the forecast of +0.4%. For March, analysts expected an increase of +0.3%. On an annualized (YoY) basis, an increase of 4.5% was expected, a slight drop from the previous month’s 4.6%.
Hitting expectations or any “positive” surprises were expected to be bullish for the Bitcoin market. Renowned analyst Ted (@tedtalksmacro) stated up front: “Bulls want to continue seeing it trend south!” and added the chances for a bullish surprise were good: “CPI + PPI prints earlier in the month, at least for now, suggests that the path of least resistance is for lower inflation numbers.”
PCE Slightly Impacts Bitcoin Price
These expectations were not met. As reported by the Bureau of Economic Analysis, core PCE came in at 0.3% on a monthly basis, as expected. On an annual basis, core PCE fell to 4.6%, also delivering the expected number.
BREAKING: US PCE data is out!
Headline y/y 4.2% vs 4.1% expectation
Headline m/m 0.1% vs 0.1% expectation
Core y/y 4.6% vs 4.58% expectation
Core m/m 0.3% vs 0.3% expectation
— Markets & Mayhem (@Mayhem4Markets) April 28, 2023
Bitcoin price reacted in line with expectations. At the time of writing, BTC was sticking to the price level around $29,300.
The big question, however, will be whether progress in fighting inflation is enough for Fed Chairman Jerome Powell. In a phone prank with a fake Ukraine President Volodymyr Zelenskyy yesterday, Powell acknowledged that there are at least two more rate hikes coming, followed by a long period of high interest rates with significant negative effects on the US economy and the US labor market.
Powell also stated that a recession in the United States is likely. “This is what it takes to get inflation down. By cooling off the economy and cooling off the labor market inflation comes down. We don’t know of any painless way for inflation to come down.”
In a prank call with a fake Zelenskyy Jerome Powell, Chairman of the Federal Reserve, admits at least 2 more upcoming interest rate hikes followed by a long period of high rates with significant negative effects on the US economy and the US labor market. https://t.co/vDb19Ed5ux
— Kim Dotcom (@KimDotcom) April 27, 2023
What Will The Fed Make Of The Data?
After the latest macro data, Fed Funds Futures traders expect a probability of more than 80% for a 25 basis points (bps) rate hike next Wednesday. The probability according to the CME FedWatch Tool was at 88% before the release of the PCE and remained at this level afterwards.
Still, the market is calling Powell’s bluff. Liz Young, head of investment strategy at SoFi shared the chart below and stated prior to the PCE release:
Market pricing implies 88% odds of a rate hike next week, up from earlier in the month. Some traders are starting to bet on a hike in June as well, but that’s less certain. Either way, markets still think we’re going to get multiple cuts later in 2023 & early 2024.
Today’s release is not expected to change this. On the other hand, a second wave of bank failures is currently brewing in the US. Higher interest rates are likely to push more regional banks to their limit. Bitcoin could once again be the beneficiary, as the Fed can’t hike as high as they would want to.
At press time, the Bitcoin price stood at $29,314.
‘Smart money’ eyes BTC bull run: 5 things to know in Bitcoin this week
BTC price action may have taken a serious hit last week, but not every class of Bitcoin investor is dashing to the exit.
Bitcoin price hits $28.5K on PCE data as macro ‘accumulation zone’ ends
Bitcoin is up $1,000 on the day as bets on $30,000 hitting soon reappear in advance of the BTC price monthly close.
Bitcoin Price Poised To Rally Big-Time On Today’s PCE Release
The Bitcoin price could see a significant uptick today Friday, December 23 at 8:30 am (EST) if the Core Personal Consumption Expenditures Price Index (PCE) comes in better than expected. And the chances are high!
Bitcoin price has been heavily dependent on macro data and the decisions of the U.S. Federal Reserve (FED) lately. The last FOMC meeting of the year on December 13 provided a bearish surprise, even though the consumer price index (CPI) came in better than expected.
However, there was a catch. After the FOMC meeting, rumors emerged that chairman Jerome Powell ignored the CPI data that arrived a few hours before the meeting, although he claimed the opposite in the press conference. Within Wall Street, several analysts spoke out, accusing Powell of hoaxes.
Why Today’s Core PCE Is Of Paramount Importance
The problem is that the Fed’s forecast for core PCE inflation seems far too high after the surprisingly weak CPI data, as Tomas Lee, an analyst at Fundstrat, writes.
As the economic forecast overview shows, the FED raised the core PCE inflation target for 2022 from 4.5% to 4.8%. With that, Powell added to the “higher for longer” narrative. But there is something “odd,” as Lee explained. The month-to-month percentage change in inflation would have to be staggeringly high to reach the FED’s 4.8% target.
Lee wonders how the FED can forecast 4.8% core PCE inflation in 2022 when inflation is moving toward 4.1-4.2%. “How can Fed forecast be so far??” Lee wrote.
The analyst points to a ransomware attack on Haver Analytics as a possible reason for this large divergence. Due to the attack, Haver Analytics may not have been able to update the data, which is why Jerome Powell and the FOMC committee ignored the positive data.
Therefore, according to the Fundstrat analyst, today’s PCE release is of massive importance. Lee writes:
We think core PCE inflation will be 0.10% compared to Cleveland Fed inflation NOW forecast of 0.26%. Any figure below 0.40% would make #FOMC figure of 4.8% too high.
Remarkably, the PCE is also the key data point for the U.S. central bank. The FED’s forecasts and its 2% target are not based on CPI, but on the PCE. Twitter user ZeroHedge estimated based on this fact:
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 terminal rate tumbles.
The Impact On The Bitcoin Price
If the PCE is significantly below the FED’s expectations, the theory would find confirmation today and could completely wipe out the bearish sentiment. The FED would possibly be forced to revise its forecasts as the PCE shows that inflation is under control.
This could prompt the FED to take a more dovish stance at the next meeting, with markets front-running this as early as today. Ultimately, the PCE release could lead to a weaker dollar, spurring risk assets like Bitcoin.
At press time, the Bitcoin price stood at $16,827. Today, like the last few days, the $16,900 level will be of key importance as the most crucial resistance at the moment.
If there is a strong push above this resistance, the next target would be the $17,400 region. Otherwise, Bitcoin investors should keep an eye on the support at $16,400.
