Crypto majors experienced a significant decline in the past 24 hours, with meme coins like shiba inu and dogecoin leading the drop.
The market is looking toward Friday's U.S. PCE inflation data for guidance on bitcoin's direction, with some analysts predicting a drop to as low as $60,000.
Some of the largest cryptocurrencies lost as much as 5% in 24 hours as traders looked toward Friday's Personal Consumption Expenditures inflation report in the U.S. and warned of further declines in the price of bitcoin {{BTC}}.
Meme coins shiba inu {{SHIB}} and dogecoin {{DOGE}} led the market lower, each losing about 5%. XRP, Solana’s SOL and BNB Chain’s BNB fell 2%, while the CoinDesk 20 (CD20), an index of the largest tokens minus stablecoins, slipped 1.6%.
Bitcoin has been testing support at $67,000 after briefly recovering to $70,000 at the start of the week. Ether {{ETH}}, which was among the biggest advancers last week after favorable regulatory decisions, has dropped over 5% since Monday.
According to the trading desk of Japanese crypto exchange bitBank, stronger-than-expected consumer sentiment and weak Treasury sales are adding to the pressure on the price of bitcoin.
“The price will likely show no clear direction until Friday’s U.S. PCE announcement, and it could be a make-or-break event for bitcoin,” bitBank said in an email. “If the inflation data comes in hotter than expected, bitcoin could give up about a half of its gain in the past two weeks and decline to around $65,000.”
FxPro senior market analyst Alex Kuptsikevich echoed the sentiment: “In the most bearish scenario, the price could roll back to $60,000. A more optimistic scenario suggests a decline to the $65K area, where the 50-day moving average lies,” he said in a Telegram interview.
The March figure rose 2.7% year-on-year. The April reading is due at 12:30 UTC tomorrow.
Elsewhere, on-chain analytics Glassnode recorded signs of a recovery in buyer interest in bitcoin. Long-term BTC holders, defined as those holding the asset for more than 155 days, have resumed accumulation for the first time since December 2023 after months of selling.
Residing just shy of the ATH, #Bitcoin continues to consolidate, with long-term investors beginning to re-accumulate coins for the first time since Dec 2023. Alongside this, a historic first tranche of #Ethereum spot ETFs have been approved in the US, seeing a +20% surge in the… pic.twitter.com/WiIB7kO0JH
— glassnode (@glassnode) May 28, 2024
Traditional stock indices showed signs of weakness ahead of the inflation figure, which could provide clues on the Federal Reserve's interest-rate trajectory. Historically, higher interest rates tend to cause bearish sentiment among investors due to the strain on market liquidity – with sell-offs across assets.
