Bitcoin Breaks to Low End of Trading Range, but June Data Could Be Next Catalyst

At 11:45 am Eastern Time, the price of one bitcoin was being traded for around $67,300. This represented a 1% decrease from the previous 24 hours and a drop of more than 2% since it had momentarily surpassed $69,000 approximately two hours prior. The CoinDesk 20 index experienced a decline of 1.1% over the last day.

Macro conditions could provide next catalyst

This week, Bitcoin’s price action has been subdued, hovering around the $67,000 to $69,000 mark with little variation. Simultaneously, other risk assets, including U.S. stocks, have faced challenges. The Nasdaq has seen a decline of approximately 2%, while the S&P 500 has lost around 1.5% despite staying near record highs.

U.S. economic data maintained a whiff of stagflation, as the Annualized Core Inflation Rate (YoY) for April, according to the Core Personal Consumption Expenditures Price Index, rose by 2.8%, in harmony with forecasts and consistent with the previous month’s figure. The Chicago PMI for May took a nosedive, registering at 35.4 against projected 41 and a decline from April’s 37.9. This dismal result can only be compared to those seen during the depths of the global financial crisis in 2008-2009 and the Covid lockdowns in March and April 2020. Consequently, the bond market experienced a rally in response, leading to a decrease of 5.5 basis points in the yield on the 10-year U.S. Treasury, settling at 4.50%.

Starting in June, Saturday is the beginning of the week, and the upcoming week is anticipated to provide additional insight into the American economic situation with Monday’s release of the national PMI report and Friday’s publication of the national employment figures. Should these reports indicate a softening of economic conditions, which could lead to lower interest rates, bitcoin might make another attempt at surpassing its previous record high of $73,000 set in March. Conversely, robust economic data may result in a reexamination of the May lows.