Bitcoin (BTC) shook off volatility on Thursday as US stocks rebounded on the back of inflation-data relief.
Key points:
Bitcoin avoids a snap reaction to US personal consumption expenditures (PCE) inflation data, which reverses a local uptrend.Analysis remains wary of inflationary tendencies despite PCE conforming to expectations.Bitwise predicts that going forward, Bitcoin will become less sensitive to Fed interest-rate changes.
PCE ends uptrend while staying above Fed inflation target
Data from TradingView showed BTC price action focusing on $64,500, broadly unchanged from the day prior.
BTC/USD one-hour chart. Source: Cointelegraph/TradingView
The major risk-asset headwind from earlier in the week in the form of a mass sell-off in semiconductor stocks eased on the day, sparing crypto during the US trading session. The S&P 500 index and Nasdaq Composite index were up 1% and 2.3%, respectively, at the time of writing.
Nasdaq Composite Index one-day chart. Source: Cointelegraph/TradingView
The June print of the US Personal Consumption Expenditures (PCE) index added another positive catalyst, this coming in at 3.7% year-on-year — in line with market expectations. May’s PCE print, at 4.1%, was the highest in three years.
PCE is considered the Federal Reserve’s preferred inflation measure as it offers a broader and more comprehensive measure of inflation and more quickly picks up adjustments in consumers’ choices in response to price changes, according to the Federal Reserve Bank of Cleveland.
“The increase in current-dollar personal income in June primarily reflected increases in compensation, personal income receipts on assets, and government social benefits that were partly offset by a decrease in farm proprietors’ income,” the US Bureau of Economic Analysis (BEA) said. The BEA said in its data release:
“The $65.2 billion increase in current-dollar PCE in June reflected increases of $58.2 billion in spending on services and $7.0 billion in spending on goods.”
US PCE data percentage change (screenshot). Source: BEA
While ending an uptrend in PCE numbers and showing the first month-on-month decline…
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