The key to Bitcoin's price lies in new catalysts
Today's market analysis on behalf of Rania Gule Market Analyst at XS.com
June 3, 2024 (Investorideas.com Newswire) Bitcoin (BTC) is trading within a tight range of around $68,000 with the start of the week today, Monday, after dipping to its lowest level of the week on Friday morning when it reached $69,600 per piece.
From my perspective, May was strong for Bitcoin, which has now risen by 11% since the beginning of the month to around $68,000. This rise is supported by a 31% increase in the price of Ethereum (ETH) due to the sudden regulatory shift in the approval prospects for an exchange-traded fund (ETF) for this asset.
I believe the subdued movement in Bitcoin this week came after the price stabilized fundamentally in the range between $67,000 and $69,000, coinciding with increased uncertainty in the markets, especially since cryptocurrencies are considered risky assets.
Additionally, US economic data continued to bear the brunt of inflationary recession fears, with the core Personal Consumption Expenditures (PCE) Price Index rising by 2.8% year-on-year in April, in line with expectations and at the same pace as the previous month.
Moreover, the Chicago Purchasing Managers Index for May fell to 35.4 compared to expectations of 41 and 37.9 in April. With the beginning of June, next week is expected to bring more clarity to the US economic picture thanks to the National Purchasing Managers' Index report on Monday and the Non-Farm Payrolls report on Friday.
In my opinion, confirmation of monetary policy easing and improved prospects of interest rate cuts could be the key incentive for Bitcoin's attempt to break above its all-time high of $73,000 set in March. However, strong economic data may mean a retest of May's lower levels around $60,000 or slightly lower.
Therefore, I believe cryptocurrency prices today will continue to struggle with volatility, leaving traders and investors puzzled about future movements. Bitcoin (BTC) and Ethereum (ETH) continued to battle market turbulence, with BTC surpassing $68,000 and ETH nearing $3,800.
Furthermore, the global market capitalization of cryptocurrencies rose modestly by 0.35% yesterday, reaching $2.54 trillion. Additionally, the total cryptocurrency market volume surged an astonishing 42.15% over the past 24 hours, reaching $64.02 billion.
Hence, it can be said that Bitcoin's price may continue its fluctuations within the current range while the market awaits further clarity on monetary policy and future economic data. Confirmation of monetary policy easing will be a driving force for Bitcoin's attempt to break new highs, while strong and unexpected economic data may pressure prices to fall towards lower levels. Therefore, investors and traders should closely monitor key economic data and monetary policy trends to make informed decisions about their moves in the cryptocurrency market at present.
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