The U.S. Bureau of Economic Analysis has released the Personal Consumption Expenditure (PCE) for February 2023. The PCE Price Index fell from 5.3% in January to 5% in February, falling short of market forecasts of 5.3%.
Meanwhile, the annual Core PCE Price Index, the Fed's favored inflation gauge, decreased slightly from 4.7% to 4.6% during the same time, falling short of the 4.7% predicted by analysts.
A slowing in inflation is a positive sign, showing that the Fed's previous year's efforts to tighten monetary policy were having some effect.
While U.S. inflation starts to decrease, Bitcoin (BTC) has been drifting in a narrow range with minimal directional movement. This has resulted in a lengthy consolidation period, which may imply that the market is preparing for a significant breakout.
Ethereum (ETH) price has held above $1,800 all week. Since Ethereum did The Merge, the number of Ethereum validators has increased throughout the year. Especially since the Ethereum Core Developer announced the launch of the Shanghai upgrade to the mainnet on 12 April 2023, it is predicted that there will be a significant change in ETH price after the validators manage to un-stake their ETH and make a withdrawal.
Bitcoin has been moving in a narrow range, with little directional movement over the past few weeks. This has resulted in a long consolidation phase, which may indicate that the market is gearing up for a major breakout. In such a scenario, the volatility could be quite high.
Moreover, the current market structure suggests that Bitcoin may be in a distribution phase, as opposed to a reaccumulation phase. This implies that selling pressure may outweigh buying pressure, which could impact the price of Bitcoin in the near term.
ETH has been trading sideways recently, with limited directional movement. The price action of ETH is strongly correlated with that of Bitcoin, which has also been moving within a tight range.
Additionally, the current market structure of ETH suggests that it may be in a distribution phase, rather than a reaccumulation phase.
This implies that there may be more selling pressure than buying pressure in the market, which could impact the price of ETH in the short to medium term.
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