Bitcoin Nears $27K Despite ‘Hot’ PCE Data Sparking June Rate Hike Bets

Bitcoin (BTC) posted snap gains at the May 26 Wall Street open as United States macroeconomic data delivered a nasty surprise.

Bitcoin foreshadows the new US inflation crisis

Data from Cointelegraph Markets Pro and trading view BTC/USD on Bitstamp showed near $27,000.

The pair unexpectedly rose after the day’s personal consumption expenditure (PCE) data showed a rise for the first time since October 2022.

Such a reading should present a headwind for risk assets, including crypto, as it means inflation remains persistent and may require more fiscal tightening to ease it.

“This Is a Big Blow to the Fed’s Fight Against Inflation,” Financial Commentary Resource The Kobeissi Letter wrote In part of a response.

Kobeissi said that expectations of an interest rate hike from the Federal Reserve were “shifting rapidly” to the PCE event.

According to CME Group fedwatch toolThe market now favors a fresh rise in June, while earlier it was more than 80% certain that a pause would occur.

Meanwhile, financial commentator TedTalksmacro acknowledged that PCE benefits were relative.

“US PCE data warmed above analyst expectations. On a 3-month annualized basis, however, core PCE fell sharply lower to … 4.2%,” he reacted,

Meanwhile, the reason for relief for the traders was the news that the Biden administration was going to strike a deal on the debt ceiling, whose deadline is now just a few days away.

The S&P 500 and Nasdaq Composite Index were up 1% and 1.65%, respectively, at the time of writing.

DXY hits 10-week high

Turning to bitcoin, Michael van de Poppe, founder and CEO of trading firm Eight, flagged the possibility of a continuation to the upside.

RELATED: Bitcoin Losing Its 200-Week Trendline Puts $20K in Play – BTC Price Analysis

“This is the first step for bitcoin as we reclaim $26,600 and look for continuation towards range highs,” he added. commented On the day’s price action.

“If the recent correction diverges, we could see a break above $29,000 next week.”

He cautioned that PCE was “not a great sign” for risk assets, noting the United States’ knee-jerk reaction to dollar strength – traditionally inversely correlated with crypto.

The US Dollar Index (DXY) rose to 104.4 on the day, its highest level since March 17.

“Some consolidation after this month’s rally would be healthy for the dollar,” popular trader Justin Bennett wrote In a dedicated forecast.

“But a daily and weekly close above 104.20 opens up early next week to 105.00. The only thing that would turn me bearish on the DXY is a daily close below 103.50.

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This article does not constitute investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making decisions.