Bitcoin Traders Warn of Pullback as U.S. Inflation Data Looms; Dogecoin Leads Majors Slide

Cryptocurrency giants have experienced a significant decline in the last 24 hours; The decline was led by meme coins such as shiba inu and dogecoin.

The market is looking to Friday’s US PCE inflation data for guidance on Bitcoin’s direction, with some analysts predicting a drop as low as $60,000.

Some of the largest cryptocurrencies have lost as much as 5% in 24 hours as investors looked at Friday’s US Personal Consumption Expenditure inflation report and warned of further declines in the price of bitcoin {{BTC}}.

Meme coins shiba inu {{SHIB}} and dogecoin {{DOGE}} led the market lower, losing around 5% each. XRP, Solana’s SOL, and BNB Chain’s BNB fell 2%, while CoinDesk 20 (CD20), an index of largest tokens minus stablecoins, fell 1.6%.

Bitcoin is testing support at $67,000 after briefly rising to $70,000 at the beginning of the week. Ethereum {{ETH}}, which was among the biggest risers last week following positive regulatory decisions, is down over 5% since Monday.

Stronger-than-expected consumer confidence and weak Treasury sales are increasing the pressure on Bitcoin price, according to the trading desk of Japanese crypto exchange BitBank.

“The price will likely not show clear direction until the US PCE announcement on Friday, which could be a make-or-break event for Bitcoin,” BitBank said in an email. “If inflation data comes in hotter than expected, Bitcoin could give up about half of its gains over the last two weeks and fall to around $65,000.”

FxPro senior market analyst Alex Kuptsikevich echoed this sentiment: “In the most bearish scenario, the price could return to $60,000. A more optimistic scenario sees a decline towards the $65,000 area where the 50-day moving average is located,” he said.

The March figure increased by 2.7% year-on-year. The April reading will be held tomorrow at 12:30 UTC.

Elsewhere, on-chain analytics Glassnode noted signs of improvement in buyer interest in Bitcoin. Long-term BTC holders, defined as those who held the asset for more than 155 days, resumed accumulation for the first time since December 2023 after months of selling off.

I reside a little shy of ATH, #Bitcoin Consolidation continues as long-term investors begin saving money again for the first time since December 2023.

Besides, a historical first slice #Ethereum Spot ETFs were approved in the US and saw a 20% increase… pic.twitter.com/WiIB7kO0JH

— camnode (@glassnode) May 28, 2024

Traditional stock indexes showed signs of weakness ahead of the inflation number, which could provide clues about the Federal Reserve’s interest rate path. Historically, high interest rates tend to cause bearish sentiment among investors due to pressure on market liquidity combined with sales in assets.