tl;dr
The U.S. election and CPI may impact Bitcoin's price, which has shown a potential bearish trend change. The Fed's PCE price index release could influence the interest rate path. Bitcoin's price surged to nearly $70,000 but has now dropped to $63,000, forming a double top pattern, indicating a possib...
U.S. election and CPI could impact bullish factor later this year
Bitcoin's double-top pattern signals potential bearish trend change ahead of key data release
Fed PCE price index may offer relief and influence interest rate path
Slowest monthly advance in core PCE figure expected, potentially leading to renewed Fed rate cuts
Strong economic data affecting yields, precious metals, and digital hard assets like crypto
The U.S. election and CPI may impact Bitcoin's price, which has shown a potential bearish trend change. The Fed's PCE price index release could influence the interest rate path. Bitcoin's price surged to nearly $70,000 but has now dropped to $63,000, forming a double top pattern, indicating a possible bearish trend change. However, the PCE price index for May is expected to show slow growth, potentially leading to renewed Fed rate cuts from September. Economists expect minimal changes in the PCE price index and a slight uptick in the core PCE.
* The U.S. election and CPI could be a bullish factor later this year. * Fed's preferred inflation gauge, the PCE price index, due Friday, could offer relief.
Bitcoin (BTC) has carved out a double-top price pattern, signaling a potential bearish trend change ahead of key data release that could influence the Fed's interest rate path. Bitcoin's price journey has been a rollercoaster this month. After surging to nearly $70,000, approaching the all-time high of March, it has now retreated to $63,000, decoupling from Nasdaq's continued move higher, largely due to faster selling by miners, profit-taking by investors near lifetime highs, and outflows from the U.S.-listed spot exchange-traded funds. The price action has formed a double top, a bearish technical analysis pattern comprising two peaks with a valley in the middle, usually appearing after a notable uptrend. The second peak represents uptrend exhaustion, with the eventual breach of the low hit between the two peaks confirming a bearish trend change. "Technically, bitcoin appears to follow a double top formation, whereas the support level is being tested. This chart formation should be our base case unless it becomes invalidated. This formation could easily see a drop to $50,000—if not $45,000," Markus Thielen, founder of 10x Research, said. "Yes, the U.S. election and CPI should be bullish later this year, but we can still have a steeper correction," Thielen added. BTC's double top. (10x Research) BTC's double top. (10x Research) (10x Research)
However, the Fed's preferred inflation yardstick, the personal consumption expenditures (PCE) price index for May, is expected to show the slowest monthly advance in the core figure in over three years. That would cement the case for renewed Fed rate cuts from September, potentially putting a floor under risk assets, including bitcoin. " Strong economic data has forced yields higher and precious metals lower on Friday. This continues to stand in the way of digital hard assets like crypto," Greg Magadini, director of derivatives at Amberdata, said in the weekly newsletter shared with CoinDesk. "This week we have multiple Fed Governors speaking, GDP and most importantly PCE on Friday (the Fed’s favorite inflation indicator)," Magadini added. Economists surveyed by Bloomberg expect no change in the PCE price index and a meager 0.1% uptick in the core PCE, amounting to 2.6% annual advances in both the headline and core figures. The projected core increase, excluding food and energy, would be the smallest since March 2021.