- US core PCE is expected to come in at 4.6% YoY and the MoM reading is expected to print 0.3%.
- The PCE index is considered a reliable indicator of inflation, therefore the reading could make or break investor sentiment towards risk assets like BTC.
- Bitcoin price started its recovery, climbing past the $26,400 level on Thursday.
US core Personal Consumption Expenditure (PCE) is a measure that captures inflation across a wide range of consumer expenses. The core PCE is considered a reliable indicator of inflation and the measure influences market participants’ sentiment towards risk assets like Bitcoin and cryptocurrencies.
The US core PCE expectation is 4.6% YoY and 0.3% MoM according to data from the FXStreet economic calendar. The latest PCE data point is scheduled for release on Friday, May 26, at 14:30 GMT.
Also read: Spotlight on PCE inflation and Fed Minutes after Powell hints at pause [Video]
US PCE expectations and how it influences Bitcoin price rally
The US PCE price index measures changes in consumer spending. The statistic is released monthly by the US Bureau of Economic Analysis and it influences the sentiment of traders towards US equities and risk assets.
If core PCE (excluding food and energy prices) comes in at market expectations or lower, it is considered bearish for the US Dollar index. Along the same lines a hot core PCE reading, above expectations, is bullish for the US Dollar index.
An event that is bearish for the USD is typically bullish for cryptocurrencies like Bitcoin, as it makes it cheaper for investors to acquire the asset and fuels demand in the short-term. A core PCE reading at the market expectation of 4.6% YoY and 0.3% MoM could therefore fuel demand for Bitcoin and strengthen the asset’s recovery rally.
Since 2012, the PCE index has guided the Federal Reserve’s policy decisions, therefore the reading is key to determine whether the central bank’s measures are reining in inflation at the desired pace.
Will Bitcoin price rally to $30,000?
The $30,000 is an important psychological barrier for Bitcoin; it is key to the asset’s price recovery in the ongoing market cycle. BTC climbed past the $26,400 on Thursday, marking a 3% recovery from the $25,888 level earlier today.
Ahead of the US PCE release, traders are driving Bitcoin price higher, hoping that core PCE remains the same YoY.
Bitcoin price is in an upward trend that started in March 2023. BTC is currently trading below two long-term Exponential Moving Averages, the 50-day and 200-day at $26,820 and $27,501.
Bitcoin needs to flip the two long-term EMAs into support to resume its recovery, as it targets the $30,000 level.
There are two resistances on the path to $30,000, at $28,459 and $29,480. These two levels have acted as resistances throughout April and May 2023.
BTC/USD four-hour price chart
A decline below the May low of $25,804 could invalidate the bullish thesis for the asset’s price.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Cardano Price Forecast: ADA bulls show signs of exhaustion as holders take profits
Cardano (ADA) price appears to be losing bullish momentum after a strong rally last week. At the time of writing on Tuesday, it is slipping 3.59%, trading at around $0.78. The decline suggests holders may be locking in profits following ADA’s 19% surge.
TRUMP meme coin claws back gains as top holders notified of dinner with President Trump
TRUMP meme coin has slashed gains to hover at $12.51 at the time of writing on Tuesday. The broad-based bearish wave has seen Bitcoin (BTC) retrace below $101,000, reflecting potential profit-taking after almost a week of persistent gains.
COIN soars as Coinbase books slot on S&P 500 index
COIN rallied over 10% in after-hours trading following an announcement by the S&P Global that Coinbase will replace Discover Financial Services in the S&P 500 index beginning May 19.
Fake Bitcoin ETF tweet could earn SEC hacker two years in US prison
U.S. prosecutors have asked a federal court to sentence SEC hacker Eric Council Jr. to 24 months in prison. Federal prosecutors in Washington, D.C., are pushing for a two-year prison sentence for Eric Council Jr., the man who pled guilty to hacking the Securities and Exchange Commission’s official X account in early 2024.
Bitcoin: BTC bulls aim for $105,000 after nearly 10% weekly gains
Bitcoin price stabilizes around $103,000 on Friday after rallying nearly 10% this week. Risk-on sentiment prevails as Trump announced a trade deal with the UK and ahead of the meeting with China this weekend.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.