Bitcoin Breaks to Low End of Trading Range, but June Data Could Be Next Catalyst

Bitcoin {{BTC}} price traded in an exceptionally tight trading range around $68,000 in the days following the U.S. Memorial Day holiday, but fell back to near a weekly low during Friday morning trading hours.

At 11:45 a.m., Bitcoin was changing hands at $67,300; That’s down 1% over the past 24 hours and more than 2% from two hours ago, when it briefly topped $69,000. More broadly, CoinDesk 20 is down 1.1% in the past day.

However, May has been strong for Bitcoin and it currently stands at $60,000, up 11% since the start of the month. This underperformed the CoinDesk 20’s roughly 20% advance and was supported by a 31% rise in the Ethereum {{ETH}} price thanks to a surprising regulatory pushback on expectations for a spot ETF for this asset.

Macro conditions may provide the next catalyst

This week’s muted move in Bitcoin (the price has remained essentially in the $67,000 to $69,000 range) comes amid struggles for other risky assets, including U.S. stocks. While still remaining near all-time highs, the Nasdaq is down nearly 2% this week, while the S&P 500 is down roughly 1.5%.

US economic data continued to smell of stagflation; April Core PCE Price Index increased by 2.8% on an annual basis, in line with expectations and at the same pace as the previous month. May Chicago PMI fell to 35.4 against the expectations of 41 and 37.9 in April. Only May’s weak reading was matched during the depths of the 2008/2009 global financial crisis and the Covid lockdowns of March/April 2020. The bond market rebounded following the news, with the 10-year US Treasury yield falling 5.5 basis points to 4.50%.

June begins Saturday, and next week will bring some more clarity to the U.S. economic picture, thanks to Monday’s national PMI report and Friday’s national employment report. Confirmation of softening economic conditions and improved expectations for lower interest rates could be the catalyst for Bitcoin’s attempt to break above the all-time high of $73,000 set in March. However, strong economic data could mean a retest of May lows.