Cryptocurrency News Predictions: Pessimistic Rise in Crypto
Cryptocurrency News Predictions: Rise in somewhat pessimistic ‘cryptos’ after inflation data in the US. Bitcoin remains close to $23,500, but appears to be “overbought”.
The bullish tone in cryptocurrencies to start the week. Bitcoin (BTC) has risen 1% in the last hours to exceed $23,400, while Ethereum (ETH) rises 2.2% and remains at $1,600.
Despite the good initial tone, analysts point out that it is difficult for the reigning cryptocurrency to improve its current situation due to the uncertainty offered by the latest battery of macroeconomic data. So thinks Katie Stockton, founder and managing partner of Fairlead Strategies, who points out that bitcoin is “overbought” and that will make it difficult for it to exceed $25,000. As for Ethereum, Stockton considers that it presents the same aspect as bitcoin since both are part of a market where macro figures are dictating the future of the price “as opposed to the fundamental value of things.”
In this sense, the PCE inflation data for January, the favorite indicator of the Federal Reserve (Fed), published on Friday was bad: the headline figure rose to 5.4% from 5.3% the previous month and the Core inflation rose to 4.7% from 4.6% the previous month. “We knew that inflation would not slow down as much as expected, but this latest data fueled Fed hike expectations. A slower-than-expected moderation of inflation is one thing and a rebound in inflation is quite another. And the Fed likes the latter much less. A rebound in inflation is the Fed’s worst nightmare, ”explains Ipek Ozkardeskaya, a senior analyst at Swissquote Bank.
“And as if the PCE drama wasn’t enough, personal spending rebounded 1.8% in January, the biggest rally since March 2021, and the University of Michigan Consumer Sentiment Index this month hit a high of 13 months. It is still well below pre-pandemic levels, yes, but it also means that it has some room to recover”, adds this expert, who believes that “the tight employment data in the US, the strong spending, and the improvement in sentiment can sound good to you, but they sound horrible to the Fed .”
Likewise, a study presented Friday by a quintet of Wall Street analysts and economists suggests that the Federal Reserve should raise rates to 6.5% to win the battle against inflation in the United States.
Other experts, such as Joe DiPasquale, CEO of the ‘crypto’ fund manager BitBull Capital, are more optimistic. DiPasquale believes that bitcoin is trying to find support in this “minor” price correction and that if it holds in the current range, it is “ likely to see $25,000 and then $30,000” . However, he cautions that “a rejection from here could see $20,000 first, followed by $18,000”.
In this position is Michaël van de Poppe, founder of the investment firm Eight, who recently pointed out that the reigning cryptocurrency could reach $40,000 and then suffer a severe correction to $20,000.
In any case, seeing the dependence that the macro figures are having on the future of cryptocurrency prices, we will have to be aware of a series of data that will be released this week. In the United States, for example, the February consumer confidence index is due to be released on Tuesday, and the weekly jobless claims on Thursday. As for Asia, a region that experts believe may be the catalyst for the next bull market, the People’s Bank of China will announce its trade balance figures on Tuesday and its inflation rate on Thursday.
In the rest of the market, few movements and lukewarmness in the majority of ‘tokens’. The rises of about 2% in Shiba Inu (SHIB) and the losses of about 1% in ripple (XRP) stand out.
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