The Bitcoin price has been under pressure for months. The bulls are unable to break above the range of $60,000 to $74,000. What does it take to do that? Lower inflation, so that the US central bank (Federal Reserve) can finally lower interest rates.
Next Friday could be crucial for Bitcoin for exactly that reason.
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Friday crucial for Bitcoin
After last week’s positive inflation data – both the consumer price index (CPI) and the producer price index (PPI) were lower than expected – but the Federal Reserve wants to see more evidence that inflation is on its way to the desired 2.0%.
We can get that proof next Friday. Then it is time for the Core PCE price index, the Federal Reserve’s favorite inflation gauge.
It would be good for Bitcoin if it also turned out lower than expected. After all, that is what it takes to convince the Federal Reserve to make a first interest rate cut in September.
Yesterday’s macroeconomic data seems to make a positive contribution to this. Yesterday it was announced that Retail Sales (sales figures in American retail) were lower than expected.
What does this mean? The American consumer is weakening. They spend less than expected, which in theory should also reduce inflation. In theory, that’s bullish for Bitcoin as it brings interest rate cuts closer.
Can inflation still pick up?
That’s the positive story. Unfortunately, there is also a case to be made for a new revival of inflation – or at least inflation that remains sticky.
It has probably not escaped your notice that the stock market (and NVIDIA in particular) is performing fantastically. That makes Americans richer on paper, allowing them to spend more money.
This is what we call the so-called wealth effect. We clearly see that NVIDIA is doing well in the Bloomberg data below. 88.9% of analysts believe you should buy NIVDIA, while there is only one person who would hit the sell button.
If inflation remains high due to this development, it could still depress the Bitcoin price in the coming months. In that respect, an exciting period is coming.
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Source: https://newsbit.nl/volgende-week-vrijdag-cruciaal-voor-bitcoin/
