Bitcoin (BTC), the leading cryptocurrency, fell from $70,230 during a bearish correction and completed a 50% Fibonacci retracement at around $68,789. This shift is driven by US economic data, increasing expectations of a Federal Reserve rate cut in September.
Anticipation of lower rates has weakened the US dollar, supporting BTC’s bullish stance. Traders are now looking ahead to key US macroeconomic reports this week, particularly the Nonfarm Payrolls (NFP) report on Friday.
Impact of Rate Cut Expectations on Bearish US Dollar and Bitcoin (BTC)
The broad-based US dollar is under pressure due to signs of softening inflation and slowing economic growth, heightening expectations of a Federal Reserve rate cut this year.
This sentiment is supported by the unexpected drop in the ISM Manufacturing PMI to 48.7 in May, down from 49.2 in April and below the forecast of 49.6. This marks the US manufacturing sector’s second consecutive month of contraction and the 18th in the last 19 months.
BREAKING: Manufacturing sector continues to contract
As ISM Manufacturing PMI comes in at 48.7, missing the consensus of 49.8
In the last 19 months, this metric has crossed 50 only once – March 2024 pic.twitter.com/VwExy0IUHc
— Game of Trades (@GameofTrades_) June 3, 2024
Traders are increasingly betting on a Fed rate reduction, with the CME FedWatch Tool indicating a roughly 60% chance of a 25 basis point decrease in September. This has prompted the US dollar to fall, supporting Bitcoin (BTC) prices.
On the data front, the US Bureau of Economic Analysis (BEA) reported that the Personal Consumption Expenditures (PCE) Price Index held steady at 2.7%, with the core gauge climbing to 2.8% year-on-year, as expected.
The personal consumption expenditures (PCE) price index increased 2.7% from a year earlier in April, little changed from March. Excluding food and energy costs, the “core PCE” rose 2.8%, matching March’s increase https://t.co/qRlfHos9KN pic.twitter.com/pRk5SLL8hg
— St. Louis Fed (@stlouisfed) June 2, 2024
Furthermore, the ISM Manufacturing PMI’s dip to 48.7 in May from 49.2 reflects the worst drop in new goods orders in nearly two years.
Key Points:
- ISM Manufacturing PMI fell to 48.7 in May, indicating contraction.
- CME FedWatch Tool shows a 60% chance of a September rate cut.
- PCE Price Index held steady at 2.7%, supporting BTC prices.
Bitcoin Price Prediction: June 4, 2024
Bitcoin is currently trading at $69,100, marking less than a 0.50% increase, exhibiting a bullish Bitcoin price prediction. The key pivot point is at $68,800, which serves as a critical support level.
#Bitcoin is trading at $69,100, up 0.39%, showing bullish momentum. Key support is at $68,800 with resistance at $69,600, $70,300, and $70,900. RSI is at 60 and 50 EMA at $68,450, indicating strong buying. Watch for a breakout or drop below $68,800 for the next move. 🚀📈 #BTCUSD pic.twitter.com/hLk3K53Aou
— Arslan Ali (@forex_arslan) June 4, 2024
Immediate resistance is at $69,600, followed by $70,300 and $70,900. On the downside, immediate support lies at $68,400, with further support levels at $67,900 and $67,300. These levels will be crucial in determining the next movement of Bitcoin.
The technical indicators are pointing towards a bullish trend. The Relative Strength Index (RSI) is at 60, indicating buying momentum. Additionally, the 50-day Exponential Moving Average (EMA) stands at $68,450, reinforcing the buying trend.
The upward trendline is supporting Bitcoin near the $68,800 level, and the closing of a Doji candle above this trendline suggests continued upward momentum. These technical signals collectively indicate a positive outlook for Bitcoin in the near term.
In conclusion, Bitcoin remains bullish above the $68,800 pivot point. Immediate resistance levels to watch are $69,600, $70,300, and $70,900. However, if Bitcoin breaks below the $68,800 level, it could lead to a sharp selling trend.
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