Bitcoin Price Pushes Towards $42,000 as US Core PCE Inflation Data Eases – How High Can BTC Go?
The Bitcoin (BTC) price is enjoying an end-of-week relief rally in wake of economic data that showed inflationary pressures in the US continued to subside to more acceptable levels in December 2023.
US Core PCE Price Index figures showed YoY inflation falling to 2.9%, below the expected rate of 3.0%.
The Bitcoin price was last probing $42,000, up over 5% in the past 24 hours as per CoinMarketCap.
The Core PCE Price Index is the US Federal Reserve’s favored measure of underlying price pressures in the USA.
With inflation in the US trending lower, this opens the door for rate cuts from the Fed this year.
Lower interest rates create a more favorable liquidity environment that can support crypto prices.
That could go some way in explaining why the Bitcoin price has pushed higher since Friday’s US market open.
As per the CME’s Fed Watch tool, US interest rate future market pricing implies a probability of just under 50% that the Fed starts cutting interest rates as soon as March, unchanged from one week ago.
That suggests that, in wake of the latest US inflation figures, macro traders aren’t substantially upping Fed rate cut bets.
That view is further substantiated by looking across traditional asset markets.
The US Dollar Index (DXY) is flat and relatively unchanged on the week in the mid-103s.
The US 10-year yield is flat and relatively unchanged on the week around 4.14%.
If the narrative in traditional asset markets was a build-up of Fed rate cut expectations, one would expect both to be falling.
The Bitcoin price could be enjoying tailwinds from US stock prices.
The S&P 500 continues to press to fresh record levels and is now above 4,900.
Positive equity market risk appetite could be spilling over to crypto markets.
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