- Bitcoin and cryptocurrency prices fell as markets reacted to January’s PCE data.
- With the S&P 500 down about 1.4% and the Dow down about 400 points, the Fed’s favorite inflation indicator fell in a frenzied market.
- Crypto analyst Recto Capital says BTC price will remain in positive territory as long as the bulls maintain support above $23,000.
Bitcoin’s price continues to struggle after its rejection from the $25,000 resistance, but today’s decline comes as the market reacts to hotter-than-expected personal consumer spending (PCE) data.
Stocks plummeted on Friday, with the S&P 500 dropping nearly 1.5% and the Dow Jones Industrial Average dropping 400 points, pushing BTC’s price below $24,000 to record lows of $23,130 on major exchanges.
Crypto, Wall Street Falls on CPE Data
CPE is the Federal Reserve’s favorite inflation gauge, and the latest data release has changed sentiment amid renewed investor fears.
The Federal Reserve uses the CPE Price Index to assess how steeply prices have risen within the U.S. economy, and the data shows prices jumped 0.6% in January and 5.4% year-on-year. indicates that Core CPE also rose at 4.7% against his forecast of 4.3%, suggesting inflation is still an issue.
“Inflation is still too high. We need to do a lot more to get back to 2%.said Loretta Mester of the Cleveland Federal Reserve Board. “I I think the inflation measure will have a little more momentum than my colleagues. Interest rates he should raise above 5% and maintain for some time.‘ she said interview with CNBC.
Bitcoin price outlook
The reaction on Wall Street also spilled over into the crypto markets, with BTC’s price breaking below the critical support line recently noted as the ‘confluent support zone’. Uncertainty over Federal Reserve interest rates left most stocks short-lived in early trading. This scenario has been replicated in cryptocurrencies as Ethereum breaks below $1,600.
Regarding Bitcoin’s near-term price outlook, popular crypto trader and analyst Recto Capital says the bull market may continue to control if Bitcoin sustains above $23,000. However, the bearish outlook will materialize if prices fall.
“A weekly retest of BTC’s low high and monthly high resistance, the confluent area, is currently underway. The price must hold here for the retest to succeed. However, a weekly close below this area is a bearish sign.‘, the analyst noted.
We’re screwed #bitcoin A weekly retest as support means the price stays within the monthly macro range.
Take a look at our monthly financial statements
1M close above ~$23400 -> possible range breakout
Close under 1M -> $BTC Stays in range and can drop in range#Crypt #bitcoin pic.twitter.com/xTAqH7pVlm
— Rekto Capital (@rektcapital) February 24, 2023