Bitcoin experienced a downturn, trading lower by 4.2 per cent to $US118,259, after a hotter-than-anticipated Producer Price Index (PPI) inflation report surfaced in the United States. This decline follows the cryptocurrency’s recent surge to a record high of $US124,517 on Thursday. The latest economic data appears to have tempered market enthusiasm.
IG market analyst Tony Sycamore noted that the overnight data release has dampened expectations for aggressive interest rate cuts by the US Federal Reserve as the year progresses. This shift in expectations is weighing on risk appetite across cryptocurrency markets, contributing to Bitcoin’s pullback.
Sycamore suggests that Bitcoin’s inability to surpass the $US125,000 resistance level indicates a likely consolidation phase. He identifies medium-term support for Bitcoin in the range of $US110,000 to $US112,000, providing a potential floor during this period of consolidation.
Sycamore added a cautionary note, highlighting that Bitcoin and Ethereum are considered high-risk assets. He stated that a continued pullback in these cryptocurrencies could serve as a warning sign for other risk assets, particularly US equities, suggesting broader market implications.
