Bitcoin, currently trading at $78,399.55, has dropped 3% in morning Asian trading, hovering near $77,000 as the market prepares for a week filled with significant macroeconomic events. This move seems to be driven more by caution than a change in market sentiment. According to Enflux, a Singapore-based market maker, 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 when the Fed might start cutting rates 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 more challenging for the Fed to signal a dovish stance. Enflux notes that the market is operating under two conflicting assumptions: that geopolitical tensions will eventually ease, but not quickly enough to influence near-term policy.
This has effectively ruled out the possibility of 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 decisive move above this level would likely require a clear signal from the Fed that oil-driven inflation is temporary. Otherwise, Enflux expects bitcoin to trade cautiously into Thursday's data releases, with sharper moves more likely tied to macroeconomic prints than the Fed statement itself.
Beyond this week, the pace of AI demand may also shape bitcoin's next moves. The Wall Street Journal reported that OpenAI has missed key revenue targets, raising questions about the demand for AI. 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. However, if AI growth does not keep pace with expectations, the dynamic becomes more complex, and any relief from slower miner selling would come later. This reinforces Enflux's broader point that the market is stuck between competing macro forces, and any slowdown in AI demand adds another layer of uncertainty without immediately resolving the key issues affecting price. For now, this keeps bitcoin trading in a narrow band, waiting for a clearer signal.