Bitcoin is currently trading at $76,556.98, down 3% in morning Asian trading, hovering near $77,000 as markets prepare for a week filled with significant macroeconomic events. The move seems driven more by caution than a change in sentiment.
According to Enflux, a Singapore-based market maker, traders are hesitant to push bitcoin prices higher ahead of the upcoming rate decision and key data releases, including GDP and inflation reports. The biggest constraint currently is oil, with Brent crude remaining above $100, complicating the inflation outlook and making it challenging for the Fed to signal 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, effectively pricing out rate cuts for June and 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.
A clear signal from the Fed that oil-driven inflation is temporary would be necessary for bitcoin to move decisively above this level. Looking beyond this week, a slowdown in AI demand, as reported by The Wall Street Journal, may also impact bitcoin's next moves. 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 slow selling, but the timing of this relief is uncertain, and any immediate sell pressure on semiconductor and data stocks would likely bring down the crypto market.