Bitcoin Climbs Back to $74,000 After U.S. PCE Inflation Report
Wall Street opened Thursday with equities and risk assets gaining modestly, while Bitcoin (BTC) rallied toward its highest level in five weeks. The move came after the U.S. Labor Department released the January Personal Consumption Expenditures (PCE) index – the Federal Reserve’s preferred gauge of inflation.
Inflation data and market reaction
The Bureau of Economic Analysis reported that the PCE index rose 0.3% month‑on‑month and 3.1% year‑on‑year in January, matching analysts’ expectations. By keeping headline inflation in line with the Fed’s target, the reading eased concerns that policymakers would need to accelerate rate hikes.
The data lifted the broader risk market: the S&P 500 was up roughly 0.5% at the time of writing, while the price of West Texas Intermediate crude slipped about 2% to the $95 per barrel level. The decoupling of crypto from oil‑price movements – a correlation that had briefly re‑emerged earlier in the week – signaled that investors were putting more weight on the inflation figure than on commodity swings.
Bitcoin’s price action
Following the release, Bitcoin surged past the $74,000 mark, setting a new intra‑day high on several TradingView charts. The rally pushed BTC/USD back into the $76‑79 k resistance zone that many traders view as the next hurdle before a possible breakout to the $80 k region.
Technical indicators painted a mixed picture:
- 50‑day simple moving average (SMA): BTC’s price retreated to this trend line, a level that has acted as overhead resistance in prior attempts to break higher.
- Relative Strength Index (RSI): The daily RSI hovered near the upper‑mid range, suggesting lingering buyer momentum but also edging toward overbought conditions.
- MACD: A recent “reset” of the MACD histogram—where the signal line crossed the zero axis—has been interpreted by some bearish analysts as a warning sign despite the price rise.
Trader sentiment
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Michaël van de Poppe, a prominent crypto trader, expressed cautious optimism. He noted that a sustained move through the $76‑79 k band could generate a “monthly engulfing candle” that would effectively erase the February correction, while also providing fresh upside for altcoins.
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Daan Crypto Trades warned that a break below the current zone could trigger a “large drop,” implying that the $74 k level may be fragile if selling pressure accelerates.
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Roman, who has taken a bearish stance, labeled the recent uptick a “bearish retest,” pointing to a combination of a rising price, declining volume, and bearish divergence on the RSI as evidence that the rally may be short‑lived.
- Independent analyst Filbfilb highlighted open‑interest (OI) on Bitcoin futures as a metric to watch. A significant decline in OI would traditionally precede the end of a bullish thrust, yet the metric remained stable in the immediate aftermath of the PCE release.
What the next moves could mean
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Breakout scenario: If Bitcoin clears the $76‑79 k window with strong volume, it could test the $80 k psychological barrier. Such a move would reinforce the narrative that lower‑than‑expected inflation is supportive of risk assets, including crypto.
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Bearish retest scenario: A failure to hold above $74 k, accompanied by a down‑tick through the 50‑day SMA, could reopen the February‑era correction, potentially pulling the pair back toward the $65 k‑$68 k range.
- Macro backdrop: The PCE data leaves the Fed’s policy path largely unchanged for now, but future releases (e.g., CPI, employment figures) will continue to shape market risk appetite. Any surprise on inflation or a shift in monetary policy expectations could quickly reverse the current momentum.
Key takeaways
| Point | Details |
|---|---|
| Inflation reading | January PCE: +0.3% MoM, +3.1% YoY – on target with forecasts. |
| Market impact | S&P 500 +0.5%; WTI crude –2% (≈ $95/barrel). |
| Bitcoin price | Re‑tested $74,000; eyes $76‑79 k resistance. |
| Technical signals | 50‑day SMA acting as resistance; RSI near overbought; MACD reset. |
| Trader outlook | Mixed – bullish on a breakout, bearish on a possible retest. |
| Risk monitor | Open interest stability, volume levels, and forthcoming macro data. |
The analysis above is for informational purposes only and does not constitute investment advice. Cryptocurrency markets are volatile, and readers should conduct their own due diligence before making any trading decisions.
Source: https://cointelegraph.com/news/bitcoin-price-eyes-74k-rematch-us-pce-inflation-boosts-crypto-stocks?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
