Bitcoin faces a critical test as it approaches a new support level before the U.S. inflation report.
Bitcoin has established a significant support level at $59,000, which traders are closely watching ahead of the upcoming U.S. core Personal Consumption Expenditures (PCE) inflation report. This level has proven resilient, with Bitcoin rebounding around it multiple times this month, making it a focal point for market participants.
The PCE report, set for release on Thursday, is expected to show the fastest inflation growth since late 2023. Analysts predict a year-on-year increase of 4.1% for the headline PCE and a core PCE rise of 3.3%-3.4%, both of which are above the Federal Reserve's 2% target.
A stronger-than-anticipated PCE reading could bolster the dollar, potentially leading to declines in risk assets, including Bitcoin. In recent trading sessions, Bitcoin prices dipped to approximately $59,000 before recovering to around $60,800. This movement mirrors earlier patterns, where a sell-off near the same level resulted in a subsequent rise to $67,000.
