The post PCE Data Shakes Up Crypto Markets: Here’s What You Should Know appeared first on Coinpedia Fintech News
The release of the Personal Consumption Expenditures (PCE) data on Friday night had a significant impact on the cryptocurrency market, causing a notable decline in prices.
The PCE data is well-known for capturing inflation and reflecting changes in consumer behavior, making it a crucial factor in the Federal Reserve’s decision-making process for setting interest rates.
Here is everything you need to know about the impact of the PCE data on the crypto markets.
Crypto Markets Respond to PCE Data Release
As expected, the release of the PCE data had a negative impact on the cryptocurrency market. In the 24 hours following the data release, Bitcoin slid 2.35% to $23,849, while Ether fell 1.02% to $1,652. The rest of the top 10 cryptocurrencies also fell on the day, with Polkadot’s Dot and Polygon’s Matic being the most significant losers, both falling over 3%.
Impact on Crypto Market Capitalization
The global cryptocurrency market capitalization decreased by 1.95% to $1.09 trillion in the 24 hours following the PCE data release. The total trading volume was down by 6.33% to $56.02 billion.
These figures indicate a significant negative impact of the PCE data on the crypto market.
The recent decline in the cryptocurrency market reinforces the argument that stocks and digital assets are becoming increasingly correlated, providing little diversification benefit. This means that traders who hold both stocks and cryptocurrencies in their portfolio are exposed to similar risks.
Bitcoin has been experiencing a pullback after failing to break above $25,200, an area that has acted as strong resistance in the past. While the recent pullback could be a temporary pause before the next leg higher, more technical evidence is needed to confirm that the worst in the crypto space is over and that Bitcoin could extend its near-term recovery.
At press time, Bitcoin is worth $23,889 and Ether is at $1,648.
Overall, the release of the PCE data had a significant impact on the cryptocurrency market, causing a decline in prices and market capitalization. The correlation between stocks and cryptocurrencies highlights the risks associated with holding both in a portfolio.
While Bitcoin and Ether may recover in the near future, it remains to be seen whether the worst is over for the crypto market.
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