Bitcoin Drops over 3% as Hotter U.S. Inflation Data Sparks Market Jitters
- Bitcoin dropped over 3%, hitting $83,971 after core PCE inflation rose to 2.8%.
- Analysts warn that a break below $83,400 could push Bitcoin toward $80,000 or lower.
- Core inflation concerns may delay Fed rate cuts, impacting BTC and other risk assets.
Bitcoin took a hit on March 28, sliding over 3% after hotter-than-expected U.S. inflation data unsettled traders. The cryptocurrency briefly touched $85,500 before reversing sharply, hitting a low of $83,971the weakest level since March 23.
The downturn followed the release of the U.S. Personal Consumption Expenditures (PCE) Index, the Federal Reserves preferred inflation gauge. While overall PCE figures aligned with expectations at 0.3% month-over-month and 2.5% year-over-year, core PCEwhich excludes food and energycame in at 2.8%, slightly above the anticipated 2.7%.
Inflation Concerns Weigh on Bitcoin
Market reactions were swift. The Kobeissi Letter, a well-followed trading resource, pointed out that core inflation was back on the rise, warning that recent data could set the stage for stagflation in 2025. March inflation data will be even more telling as the trade war rages on, it added.
Sticky inflation is a concern for risk assets like Bitcoin, which tend to thrive in lower interest rate environments. Crypto analyst Ali Martinez noted that while Februarys PCE print was expected, the slight core PCE beat could delay the Federal Reserves rate cuts. Not ideal for risk assets like Bitcoin, he cautioned.
Daan Crypto Trades also weighed in on the markets reaction to the inflation report, stating, PCE data coming up so its going to be a volatile day in the markets I reckon.
Bitcoins Key Technical Levels Under Pressure
Bitcoin continues its upward trajectory, though momentum appears to be weakening, noted analyst Michaël van de Poppe. He cautioned that losing the $84,000 support level could trigger a decline toward the $78,000$80,000 range before any significant recovery occurs.
Meanwhile, trader CRYPTOSIXT highlighted that on Binances BTC/USDT 4-hour chart, it broke below a critical ascending trendline. The move beneath $84,000, combined with hawkish inflation data, has shifted short-term sentiment bearish.
For now, Bitcoins immediate support lies at $83,400, according to CRYPTOSIXT. A failure to hold that level could open the door to $82,000, where some traders expect a temporary bounce. However, if selling pressure persists, Bitcoin may be on track for a deeper correction, with $80,000 as a critical level to watch.
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Read more: https://www.tronweekly.com/bitcoin-drops-over-3-as-us-inflation-data-sparks-market-jitters/
Text source: TronWeekly
