Bitcoin investors are closely monitoring the upcoming release of the U.S. Personal Consumption Expenditures (PCE) inflation report scheduled for March 28. This report, issued by the U.S. Bureau of Economic Analysis, tracks inflation trends based on consumer spending and is expected to offer insights into the overall economic situation. Analysts suggest that a decrease in inflation worries could lead to a rise in Bitcoin prices, with some predicting an increase to $110,000 before a potential decline to $76,500.
April has historically been a strong month for Bitcoin performance, with an average monthly return of 12.9%, as reported by CoinGlass data. The recent decision by the Federal Reserve to ease its monetary policy could enhance liquidity, potentially contributing to a price surge. Juan Pellicer, a senior research analyst at IntoTheBlock, emphasized that Bitcoin's resurgence is being fueled by institutional interest and significant capital inflows. "BTC is displaying signs of recovery, propelled by mounting institutional interest and substantial investments from major entities," he remarked.
Global trade tensions are a major focus for investors, with Bitcoin's price dropping by over 14% following U.S. President Donald Trump's announcement of import tariffs on Chinese goods on Jan. 20. However, markets saw a slight rebound after Trump hinted at possible exemptions or reductions in tariffs for certain trading partners. Despite this, uncertainty persists. Nicolai Sondergaard, a research analyst at Nansen, highlighted that market pressure is likely to continue until at least April 2, contingent on countries reaching consensus on trade policies. "I am keen to observe developments regarding tariffs from April 2nd onwards. Perhaps some may be eliminated, but this hinges on reaching agreements with all nations," he observed.
QCP Group, a digital asset firm based in Singapore, underscored the significance of the PCE report in guiding Bitcoin's movement. "Approaching Friday’s quarterly expiry, with the highest open interest in topside strikes above $100K, we anticipate that major volatility driven by options positioning alone is unlikely. However, attention will shift to the PCE inflation data, potentially serving as the next key driver," the firm conveyed via Telegram.
Following Trump's mention of potential tariff exemptions, risk assets have seen some recovery, calming market uncertainties. Although some analysts remain wary of ongoing volatility, many believe that Bitcoin is poised for new highs before any substantial correction. The broader economic environment presents uncertainties, with inflation worries, trade negotiations, and monetary policy changes influencing investor sentiment. With the PCE inflation report on the horizon, Bitcoin traders are eager to detect any indications of reduced macroeconomic risks that could steer further price fluctuations.