The cryptocurrency market has been eagerly awaiting the Personal Consumption Expenditure (PCE) inflation data for March for signals about the current economic health in the US. Notably, according to the Bureau of Economic Analysis, PCE inflation for March rose 0.5% month-on-month, exceeding Wall Street expectations.
Meanwhile, anticipation over PCE inflation data intensified after the latest economic data painted a bleak picture while dampening investor sentiment. In the context, the latest US GDP data for the first quarter, released on Thursday, April 25, weighed on global market sentiment.
The latest data from the Bureau of Economic Analysis showed that personal consumption expenditure inflation for March rose 0.5%, following a 0.3% rise in the previous month. Notably, the market was expecting a similar advance of 0.3% month-on-month for the month.
Meanwhile, year-on-year, PCE inflation rose 2.7%, after rising 2.5% in February and above market expectations of 2.6%. Moreover, core inflation of personal consumption expenditures, excluding food and energy prices, increased by 0.3% m/m and 2.8% y/y.
Notably, the market was also expecting core inflation of PCE to rise by 0.3% per month. On an annualized basis, the forecast was 2.7%. Meanwhile, hotter-than-expected inflation data weighed on market sentiment, raising concerns about further delays in plans to cut interest rates by the Fed.
The US Federal Reserve has kept inflation high to rein in inflation, forcing many investors so far to remain on the sidelines. In addition, recent hawkish comments from Fed officials indicated a possible delay in interest rate cut plans, as inflation remained above the 2% target range.
Bitcoin Bullish Outlook Amid Declining Trading Volume
The price of Bitcoin has risen slightly over the past 24 hours to trade at $ 64,225 However, trading volume fell by 7%, amid the gloom of the wider market. Despite the calm in the market, Bitcoin users and crypto enthusiasts are still strong in the market as some expect a move equivalent upwards.
Bitcoin still has some bullish potential remaining despite its recent all-time high of $73,777.
Half Bitcoin provides an exceptional opportunity for investors. When you consider investing in currency, remember that although the long-term future seems optimistic due to increased scarcity, the short-term market can be very turbulent, so you need to be careful about how to do it.
The events of halving the price of Bitcoin have traditionally boosted the price of Bitcoin, giving rise to capitalization trends. Half events often generate positive market sentiment, leading to an uptrend before and after.
The expected scarcity of the supply of Bitcoin leads to increased demand, leading to a rise in its value.
While this is the case, you should note that the previous rise in prices after the halving does not mean that it will occur after the halving in 2024. To be on the safe side.
Bitcoin Price Forecast as Markets Head Weekend
The price of Bitcoin is in a difficult place, stuck between the zone of strong bearish activity to the top and strong bullish activity to the bottom. To get out of here, the price of Bitcoin needs a catalyst to push it north. Some say this could be trading exchange-traded funds (ETFs) in Hong Kong, and is expected to start on Monday.
However, investors looking to take long-term long positions for Bitcoin, should wait for a decisive move of the Relative Strength Index (RSI) above the average level of 50.
Bitcoin Holders Strategies During the Half Event
Bitcoin’s half-event often triggers a flurry of activity in the cryptocurrency market. With the bull market for 2024 kicking off, investors may see this as a signal to explore other cryptocurrencies that are likely to rise. While Bitcoin is still a big focus, there are many other players who deserve attention for their growth prospects. This requires tight monitoring of emerging trends and market indicators pointing to cryptocurrencies that can lead to significant gains.
Events of halving the price of Bitcoin often lead to bullish sentiment and an increase in prices, triggering speculation and optimistic expectations. However, Balašević suggests a more detailed approach during these periods:
Bitcoin owner groups offer different strategies. Large holders of 1,000 to 10,000 bitcoins, or cryptocurrency whales, tend to sell early during rising prices to secure profits without destabilizing the market. In contrast, smaller holders with 0.01 to 10 bitcoins often retain or increase their stakes even after the market reaches its peak.
Medium-sized investors who manage between 100 to 1,000 bitcoins usually show a strategic model for buying and selling, anticipating market developments. These holders quickly adapt to changing circumstances, showing professional and measured investment behaviors. Balašević highlights the complexity of the current market dynamics. While small shareholders are actively buying, larger groups are stabilizing, suggesting a cautious approach with expectations of market corrections.
Another important metric, the average age of an investment in dollars (MDIA), tracks the average lifespan of dollars invested in bitcoin. The MDIA is growing suggests that bondholders are reluctant to sell, indicating confidence in rising prices. Conversely, a decline may indicate profit-taking and potential market peaks followed by declines.
