Where Is Bitcoin Heading in June 2024?
It was an eventful week last week, with plenty of macroeconomic data coming from both sides of the Atlantic. The headline EU CPI rose to 2.6% in May from 2.4% in April, while core CPI accelerated from 2.7% to 2.9%. These figures slightly complicate decision-making process for the ECB as they are expected to cut rates this Thursday. I expect they will cut rates regardless of higher inflation for May, however, I believe they will adopt more cautious rhetoric and approach to lowering rates for the rest of this year.
More importantly, last week both headline PCE index and Core PCE index in the U.S. printed unchanged figures for April 2024, as expected by the market. The PCE index is a measure of prices across different products and services in the U.S. It measures changes in consumer behavior and it’s the preferred inflation measure for the Fed. The status quo in PCE may push the Fed to say on June 11-12th, 2024 that they need more data on inflation before they begin cutting rates. As a result, I expect more sideways trading for risky assets like stocks and cryptocurrencies until more data is available for both inflation and employment in the U.S.
(BTC) has briefly crossed the $70,000 mark on Monday. However, a considerable ask liquidity has pushed it back to around $69,000, even though there was around $105 million of new net inflows for the spot Bitcoin ETFs on Monday, closing 15th day of positive net inflows. Collectively, the 11 ETFs has so far accumulated almost $14 billion since their inception in January 2024. As it can be seen on the chart from the Block, the net inflows are significantly lower than those reported in March when we saw inflows larger than $1 billion. The drop in net inflows may be attributed to macroeconomic forces that negatively affect demand for risky assets like stocks and cryptocurrencies.
The CMC Crypto Fear & Greed Index, which is the digital asset market sentiment indicator, dropped a little to 60.00 compared to the previous week, indicating “Greed”. We saw the total cryptocurrency market cap dropped by around 1% to $2.53 trillion on Monday compared to a week ago, with (ETH)’s dominance floating at around 18% while Bitcoin (BTC)’s dominance hovered around 52.7%. The USDT dominance floats at around 4.4%, which is almost 50% lower from its peak in January 2023, indicating that funds were gradually shifting from stable coins to altcoins over the last year and a half.
source: altFINS.com
TOP WEEKLY CRYPTO GAINERS & LOSERS
Based on altFINS’s Crypto Screener
Top 3 gainers:
· $FLOKI +22.1%
· $TIA +18.4%
· $WIF +14.6%
Top 3 losers:
· $LDO -8.1%
· $TAO -12.5%
· $UNI -13.3%
source: altFINS.com
SO, WHERE IS BITCOIN HEADING IN JUNE?
Bitcoin (BTC) continues to consolidate as it trades within a sideway channel between $60,000 – $72,000. This consolidation may take another few months before we see Bitcoin resuming its bull run. Macroeconomic developments are also supporting sideways trading as more data on the U.S. inflation and employment is needed for the Fed to make its next move on interest rates. We saw that the price did a retest in the upper bound at around $70,000 level several times and I have observed that even these retests failed to hold, which makes me believe the price may now fall back to around $60,000 support zone during June. If the support fails to hold then we could revisit the next support zone of $50,000 – $52,000. To stay updated on future BTC price developments and detailed technical analysis, explore more on altFINS.
source: altFINS.com
WHAT TO EXPECT THIS WEEK
This week I will be closely observing the ADP Employment figures in the U.S., the initial jobless claims and the U.S. unemployment report for May 2024. This week’s employment data may bring some support to decision-making process for the Fed that holds monetary policy meeting next week. The ADP Employment, focusing on private sector labor market, is expected to print an additional 175,000 new jobs compared to 192,000 from the previous month, while the jobless claims are expected to slightly increase to 220,000 from 219,000 a month earlier. The unemployment rate is expected to remain unchanged at 3.9%, however, we saw few negative revisions over the last few months, indicating that the U.S. labor market may turn to be weaker than previously thought.
If there is a sign that the U.S. labor market remains solid and unemployment rate remains unchanged or even better, than the Fed will not feel pressure to cut rates given the U.S. economy swims through “sticky” inflation. On contrary, another revised sign of weakness in the U.S. labor market will be supportive for risky assets like stocks and cryptocurrencies in the short-term. Nevertheless, I think markets will be also curious to see more data for the U.S. CPI, which is scheduled for June 12th, 2024, and the outcome of the Fed monetary policy meeting next week.
Marek Hric
Head of Digital Assets Research
altFINS – #1 Crypto Analytics Platform – Scan and analyze crypto markets for profitable trading ideas.
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