Bitcoin, currently trading at $79,013.87, has dropped 3% in morning Asian trading, hovering near $77,000 as the market prepares 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 push bitcoin prices higher ahead of the upcoming rate decision and subsequent data releases, including GDP, PCE inflation, and the Employment Cost Index, which will shape expectations for potential rate cuts by the Fed in the second half of the year. The main constraint currently is oil, with Brent crude remaining above $100, complicating inflation outlook and making a dovish signal from Fed Chair Jerome Powell less likely.
Enflux notes that the market operates under two competing assumptions: that geopolitical tensions will eventually ease but not quickly enough to impact near-term policy, effectively pricing out rate cuts for June and creating ambiguity 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 likely tied to macro prints rather than the Fed statement itself. Beyond this week, a less visible force, the pace of AI demand, may also influence bitcoin's next moves, as reported by The Wall Street Journal that OpenAI has missed key revenue targets. Listed BTC mining companies have taken on significant debt to pivot to hosting AI data centers, believed to be more profitable than mining.
A slowdown in AI demand could slow selling, but the timing of such relief would be complex, as sell pressure on semiconductor and data stocks due to weaker tech and risk appetite would likely affect the crypto market first. This adds another layer of uncertainty without immediately resolving the primary concerns for price, keeping bitcoin trading in a narrow band as it waits for clearer signals.