Bitcoin is currently trading at $78,348.72, down 3% in morning trading, with markets bracing for a pivotal week of macroeconomic catalysts. The downward movement appears to be driven by caution rather than a shift in market sentiment.
According to Enflux, a Singapore-based market maker, traders are hesitant to drive bitcoin's price higher ahead of the upcoming rate decision and data releases, including GDP, PCE inflation, and the Employment Cost Index, which will shape expectations for potential rate cuts in the second half of the year. The primary constraint currently is oil, with Brent crude remaining above $100, complicating the inflation outlook and raising the bar for a dovish signal from the Fed.
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 a more 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, often viewed 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 tentatively into the data releases, with sharper moves more likely tied to macro prints than the Fed statement itself.
Beyond this week, the pace of AI demand may also shape bitcoin's next moves, with the Wall Street Journal reporting that OpenAI has missed key revenue targets, raising questions about the growth of 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, as miners have both the incentive and financing to build when demand for compute is strong, often leading to continued BTC sales. However, if AI growth does not keep pace with expectations, the dynamic becomes more complex, with a potential easing of miner-driven selling over time. The issue is timing, as sell pressure on semiconductor and data stocks due to weaker tech and risk appetite would likely bring down the crypto market, while any relief from slower miner selling would come later. This reinforces Enflux's broader point that the market is stuck between competing macro forces, with any slowdown in AI demand adding another layer of uncertainty without immediately resolving the key issues affecting price.
As a result, bitcoin is expected to continue trading in a narrow band, awaiting a clearer signal.