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Bitcoin Traders Warn of Pullback as U.S. Inflation Data Looms; Dogecoin Leads Majors Slide

May 29, 2024
  • Crypto majors experienced a significant decline in the past 24 hours, with meme coins like shiba inu and dogecoin leading the drop.
  • The market is looking toward Friday’s U.S. PCE inflation data for guidance on bitcoin‘s direction, with some analysts predicting a drop to as low as $60,000.
As an experienced analyst, I believe that the recent decline in the cryptocurrency market, particularly in meme coins like Shiba Inu and Dogecoin, is a cause for concern. The market’s focus on Friday’s U.S. PCE inflation data adds to the uncertainty, with some predicting a potential drop in bitcoin’s price to as low as $60,000.As a crypto investor, I’ve noticed that some major cryptocurrencies took a hit, losing up to 5% of their value within the last 24 hours. The reason for this sell-off? Traders are keeping a close eye on upcoming economic data, specifically the Personal Consumption Expenditures (PCE) inflation report in the United States. With cautious anticipation, they’re bracing themselves for potential further price declines, particularly in bitcoin (BTC).
Shiba Inu (SHIB) and Dogecoin (DOGE), the meme coins, contributed to the market’s downturn, with each experiencing a approximate 5% decrease. XRP, Solana’s SOL, and BNB Chain’s BNB followed suit, experiencing a fall of around 2%. The CoinDesk 20 (CD20), which is an index consisting of the largest tokens excluding stablecoins, saw a decline of 1.6%.
Bitcoin experienced a setback and dipped back down to test the support level at $67,000 following its brief surge to $70,000 earlier in the week. On the other hand, Ether (ETH) – one of the major gainers last week due to positive regulatory news – has seen a decline of over 5% since Monday.

Based on reports from bitBank’s trading desk, the robust consumer sentiment and subpar Treasury bond sales have been contributing significantly to the increased pressure on bitcoin’s price.

“Bitbank predicts that the price of bitcoin will remain uncertain leading up to Friday’s US PCE inflation announcement. This event could significantly impact the cryptocurrency, potentially causing it to lose nearly half of its recent gains and dip down to approximately $65,000 if the data shows higher-than-anticipated inflation.”

Expert’s perspective: Alex Kuptsikevich of FxPro, a senior market analyst, shared his views in a Telegram conversation. In the least favorable forecast, he indicated that the price may drop to $60,000. On a more positive note, he suggested a possible decline to around $65,000, which is where the 50-day moving average resides.

The March figure rose 2.7% year-on-year. The April reading is due at 12:30 UTC tomorrow.

In other parts of the blockchain, according to Glassnode’s analysis, there have been indications of renewed enthusiasm among Bitcoin buyers. Specifically, long-term investors, identified as those who have possessed the cryptocurrency for over 155 days, have recently begun acquiring Bitcoin again after a prolonged period of selling it. (December 2023)

Prior to the release of the inflation data, conventional stock indices exhibited indications of vulnerability, potentially offering insights into the Federal Reserve’s future monetary policy regarding interest rates. Historically, rising interest rates have led investors to adopt a more cautious stance, with concerns over decreased market liquidity resulting in widespread selling across various asset classes.

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2024-05-30 14:09