As a researcher with experience in the crypto market, I’m keeping a close eye on the upcoming events that could impact the market direction. The focus is currently on the U.S. Federal Reserve’s preferred inflation gauge, PCE and core PCE data, which is set to be released soon. Traders are bracing for this data as it could determine the market’s trajectory in the coming weeks.
The cryptocurrency market experienced a modest bounce back, yet it continues to feel the strain as investors prepare for the release of inflation figures and crypto options expirations on May 31. The majority of altcoins are taking the brunt of the damage as they lose value relative to Bitcoin‘s price, causing Bitcoin’s dominance to surge past 53% once more.
Markets Focus on Fed’s Preferred Gauge PCE Inflation
As a researcher, I’m observing that traders are currently keeping a close eye on the PCE and core PCE inflation figures. These statistics are given significant importance by the U.S. Federal Reserve as they serve as their preferred indicators of inflation. It is expected that the U.S. Bureau of Economic Analysis will soon unveil crucial inflation data. The release of this information could potentially shape market trends for an extended period.
According to experts on Wall Street, the actual rate of PCE inflation for the year is predicted to remain unchanged at a level of 2.7%. Additionally, there are expectations that the monthly PCE inflation will also stay consistent at a rate of 0.3%, as it was in the previous month.
From my perspective as an analyst, the market anticipates that annual and monthly core PCE inflation will hold steady at 2.8% and 0.3%, respectively. The stable actual PCE inflation numbers are seen positively by markets, implying a potential easing of inflationary pressures. However, Wall Street institutions foresee an imminent shift in the inflation trend, which could fuel a market rally.
Bitcoin and Ethereum 8.2 Billion Options Expiry
As a financial analyst, I’d interpret this data as follows: Over 69 thousand Bitcoin options with a total notional value of approximately $4.7 billion are set to expire on Deribit by May 31st. The put-call ratio stands at 0.61, suggesting an increase in call open interest preceding the monthly expiry. The maximum pain point is currently at $66,000, which falls below the current price level. Consequently, we can anticipate significant market volatility and potential price pullbacks on the expiration day.
As a researcher, I’ve uncovered some intriguing data regarding Ethereum options. Specifically, there are approximately 909,000 options with a total notional value of around $3.4 billion that are set to expire. The put-call ratio for these options stands at 0.60. Additionally, the max pain point for these options is currently priced at $3,300. Remarkably, Ethereum’s current trading price surpasses this max pain point, offering traders an opportunity to realize profits.
Adam from Greekslive shared that the price surge-induced volatility receded swiftly. The short-term implied volatility for Bitcoin dropped to 40%, whereas Ethereum’s decline was more moderate, hovering around 60%. Market focus has shifted towards potential Ethereum ETF approvals, as any related news could trigger a notable price increase.
BTC Price Eyes New ATH
As an analyst, I’ve noticed that the US dollar index (DXY) took a dip below the 104.70 mark following several days of consecutive gains. The latest GDP data for the United States was adjusted downward to 1.3% growth in the first quarter, which aligns with the forecasts. The primary reason for this decrease can be attributed to a slower pace of consumer spending.
As a researcher, I’ve observed that the US 10-year Treasury yield has been trending downward, approaching the 4.55% mark after reaching a four-week high of 4.61% the previous day. Market participants are carefully interpreting recent data to gain insights into the Federal Reserve’s future monetary policy direction. Remarkably, Neel Kashkari, President of the Minneapolis Federal Reserve Bank, has conveyed that the current policy stance is tightening but hasn’t definitively ruled out further rate increases.
As a crypto investor, I believe that a continued decline in the DXY index and treasury yields could potentially lead to a recovery in Bitcoin’s price. The reason being is that easing inflationary pressures could reduce the appeal of traditional safe-haven assets like gold and US Treasuries, making Bitcoin a more attractive alternative. The recent positive CPI data report fueled this optimism among traders, as they anticipate similar outcomes from the upcoming PCE data release.
In simple terms, the cost of Bitcoin rose by 2% over the past day, reaching approximately $68,500. The lowest and highest prices in the previous 24 hours were recorded at $67,118 and $69,500 respectively. Additionally, there has been a notable uptick in trading activity, with a 10% surge in volume, implying heightened investor attention.
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2024-05-31 02:00