Key Points
- Bitcoin (BTC) price has rebounded above $63,000, with trading volume increasing by 76%.
- This surge comes ahead of the release of US inflation data, which could influence future BTC price movements.
Bitcoin (BTC), the world’s largest cryptocurrency, has rebounded to over $63,000 after experiencing selling pressure over the last weekend. As of the time of writing, Bitcoin’s price has risen by 2.96% to $62,715, and its market cap is at $1.235 trillion.
Interestingly, Bitcoin’s daily trading volume has spiked by 76% to over $23 billion. This increase in BTC trading activity precedes the release of US inflation data this week.
Economic Slowdown in the US
Current economic data indicates that the US economy has been slowing down compared to its strong performance last year. The US employment numbers for April showed weaker growth than market estimates.
If this trend continues, it might prompt the Federal Reserve to lower interest rates to prevent a significant downturn in the US economy. Consequently, investors are seeking confirmation of the ongoing presence of inflation. This data could provide more clarity on the scale, timing, and likelihood of interest rate cuts throughout the year.
Upcoming US CPI Numbers
This week, the market will gain more insight into the US inflation numbers. On Tuesday, the US will release the Producer Price Index (PPI) data, followed by the Consumer Price Index (CPI) data on Wednesday.
Before the release of this week’s inflation reports, the CME’s FedWatch tool predicts a 24.6% chance of a rate cut at July’s Federal Open Market Committee (FOMC) meeting and a 48.6% probability at September’s meeting. Interest traders anticipate a 96.5% likelihood of unchanged rates at June’s meeting.
Analysts at QCP Capital have noted that unless the Fed clearly rules out rate cuts or hints at rate hikes, the markets will likely continue to price in cuts. This expectation could maintain a bullish tone in the market for some time.
So far, the Bitcoin price has managed to stay above the critical support levels of $60,000. However, it has consistently failed to surge past $64,000, resulting in a narrow trading range.
Popular crypto analyst Michael van de Poppe has suggested that if the BTC price fails to convincingly break out above the resistance of $64,000, it could see further pullbacks under $60,000. He stated that losing $60,000 could lead to a further 15% correction in BTC price.
