Bitcoin, currently trading at $76,438.85, has fallen 3% in morning trading in Asia, hovering around $77,000 as markets prepare for a week filled with significant macroeconomic events. The decline appears to be driven by caution rather than a shift in market sentiment. According to Singapore-based market maker Enflux, traders are hesitant to drive bitcoin prices higher ahead of the upcoming rate decision and key data releases, including GDP, PCE inflation, and the Employment Cost Index.
These releases will shape expectations for a potential rate cut by the Fed in the second half of the year. The primary constraint currently is oil, with Brent crude remaining above $100, complicating the inflation outlook and making it challenging for the Fed to adopt a dovish stance.
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 effectively ruled out rate cuts for June and created a more ambiguous environment 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 level often seen as a proxy for marginal buyer conviction. A decisive move above this level would likely require a clear signal from the Fed that oil-driven inflation is temporary. In the absence of such a signal, Enflux expects bitcoin to trade cautiously into Thursday's data releases, with sharper moves more likely tied to the macro prints than the Fed statement itself. Looking beyond this week, the pace of AI demand may also impact bitcoin's next moves.
The Wall Street Journal reported that OpenAI has missed key revenue targets, raising questions about the growth of AI demand. Listed BTC mining companies have taken on significant debt to pivot to hosting AI data centers, a venture believed to be more profitable than mining. A slowdown in this pivot could potentially slow selling pressure.
However, the timing of such a slowdown is critical, as sell pressure on semiconductor and data stocks due to weaker tech and risk appetite would likely impact the crypto market, while any relief from slower miner selling would come later. This adds another layer of uncertainty to the market, keeping bitcoin trading in a narrow band as it waits for a clearer signal.