Crypto Market In The Red With News Of Hot US PCE Inflation Data

Crypto News Today: Crypto prices and the US stock futures dropped in response to the news of stronger than expected rise in prices in January 2023. The core personal consumption expenditure (PCE) price index is key to the Federal Reserve‘s estimation of inflation rate in the US economy. In line with the views of the Fed’s Board of Governors that the ongoing interest rate hikes are appropriate, the PCE index for January rose 0.6%. Hence, the cryptocurrency market reacted bearishly to the hot PCE inflation numbers over fears of more rate hikes in coming months.

Also Read: Polygon (MATIC) Gaining Steam Among ETH Whales Ahead Of zkEVM Launch

The Dow Jones futures fell by 1.4% while the S&P 500 and Nasdaq futures too dropped sharply after the release of the price rise data. Even Bitcoin (BTC) price fell sharply in reaction to the news, with a dip of around 1%.

Bearish Or Bullish For Crypto?

The US Commerce Department reported that personal consumption expenditures excluding food and energy increased 0.6% in January, and was up 4.7% from a year ago. The market expectation for the PCE index was for a reading of 0.5% rise in January.

In the wake of recent macro announcements, the BTC price has been in close correlation with S&P 5oo Index, which is dominated by the technology stocks. This explains the crypto market reaction to PCE inflation data. However, trends from the peak bear market in 2022 showed crypto prices recovering to bullish recovery after important macro announcements like the Fed’s rate hike. Hence, the current scenario could perhaps be a case of bear trap leading to the weekend.

Also Read: Ark Invest CEO Cathie Wood Bullish On Coinbase’s Base Layer-2 Blockchain, Buys More COIN

Anvesh reports major developments around crypto adoption and trading opportunities. Having been associated with the industry since 2016, he is now a strong advocate of decentralized technologies. Anvesh is currently based in India. Follow Anvesh on Twitter at @BitcoinReddy and reach out to him at [email protected]

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.