Bitcoin is currently trading at $76,118.82, down 3% in morning trading, as the market prepares for a week filled with significant macroeconomic events. The decline appears to be driven by caution rather than a change in market sentiment. According to Enflux, a Singapore-based market maker, traders are hesitant to drive up the price of bitcoin ahead of the upcoming rate decision and data releases, including GDP, PCE inflation, and the Employment Cost Index. These releases will shape expectations for when the Fed can begin cutting rates in the second half of the year.
The current constraint on the market is oil, with Brent crude remaining above $100, complicating the inflation outlook and making it more difficult for the Fed to send a dovish signal. Enflux notes that the market is operating under two competing assumptions: that geopolitical tensions will eventually ease, but not quickly enough to influence near-term policy. This has led to a 95% chance of 'no change' in rate cuts for June, creating an ambiguous backdrop for risk assets.
As a result, bitcoin has struggled to break above key technical levels, trading roughly 4% below its short-term holder cost basis near $80,700. A clear signal from the Fed that oil-driven inflation will prove temporary is likely needed for bitcoin to move decisively above this level. Looking beyond this week, a slowdown in AI demand may also impact bitcoin's price. The Wall Street Journal reported that OpenAI has missed key revenue targets, raising questions about the pace of AI growth.
Listed BTC mining companies have taken on significant debt to pivot to hosting AI data centers, which could be more profitable than mining. A slowdown in this pivot could slow down miner-driven selling, but the timing of this relief is uncertain. For now, bitcoin is likely to continue trading in a narrow band, waiting for a clearer signal from the market.