The cryptocurrency market continues to be influenced by significant news flows. Bitcoin, trading at $43,762 at the time of writing, did not react to positive inflation data following the release of U.S. macroeconomic figures on December 22, which led to predictions of rising interest rates. Experts weigh in on the prospects for Bitcoin as it maintains its resistance level despite crossing $44,000 earlier in the week.
The Personal Consumption Expenditures (PCE) Index, a preferred inflation measure by the Federal Reserve, exceeded expectations in November, coming in at 2.6% against a forecast of 2.8%. This highlighted the impact of tightening monetary policy on curbing inflation. Market reactions, as indicated by CME Group’s FedWatch tool, suggested a 15% likelihood of interest rate decreases in the coming month.
The Kobeissi Letter, in a shared commentary, noted that this was the lowest PCE inflation figure since May 2021, a sign welcomed by the Fed. The November macro data largely confirmed the narrative of decreasing inflation, bolstering market hopes for a Fed interest rate cut in 2024. The question remains on the timing and number of these reductions.
Despite encouraging macroeconomic signals and the U.S. dollar’s strength falling to its lowest level since late July, Bitcoin’s price movement continued to offer hope to investors throughout the day. Popular investor and analyst Skew highlighted increased bid liquidity on the world’s largest crypto exchange, Binance, and raised support expectations to the $41,000 to $42,000 range.
Analyst Crypto Tony pointed out the $44,300 level on the BTC/USD chart as a line to reclaim for considering long positions in his latest trading advice. Meanwhile, many analysts emphasized that Bitcoin needs to surpass its highest level seen in 2023 after consolidating for most of December. Investor and analyst Alan Tardigrade shared with his followers that if Bitcoin breaks the upper resistance line of its rectangular consolidation, it could reach a target of $48,000.
Overall, the cryptocurrency market is closely monitoring economic indicators and expert analyses, with Bitcoin showing resilience and potential for significant movements depending on broader financial trends and investor sentiment.