Get Ready for Bitcoin’s Explosive Breakout: June Data Sparks Potential Surge

The value of bitcoin (BTC) has shown stability around $68,000 post the U.S. Memorial Day break, with a slight decline towards the end of the week.

At 11:45 am ET, bitcoin was priced at $67,300, indicating a 1% decrease in the last 24 hours and a drop of over 2% from its peak of $69,000 two hours earlier. Simultaneously, the broader CoinDesk 20 index also experienced a 1.1% decline during the same period.

Despite this recent fluctuation, May has been a positive month for bitcoin, witnessing an 11% increase from its initial level of around $60,000. However, it has not performed as impressively as the CoinDesk 20, which surged by 20% driven by a 31% rise in the price of ether (ETH) due to unexpected regulatory developments surrounding a spot ETF for the asset.

Potential Influence of Macro Conditions

The current stability in bitcoin’s price, hovering between $67,000 and $69,000, aligns with challenges faced by other high-risk assets like U.S. stocks. Despite being close to record highs, the Nasdaq witnessed a 2% decline this week, while the S&P 500 saw a drop of approximately 1.5%.

Economic data from the U.S. has indicated signs of stagflation, with the April Core PCE Price Index showing a 2.8% year-over-year increase, in line with expectations. The May Chicago PMI dropped to 35.4, below the expected 41 and lower than April’s 37.9. This weak reading has only been matched during the 2008/2009 financial crisis and the March/April 2020 Covid lockdowns. Following this news, the bond market rallied, with the 10-year U.S. Treasury yield decreasing by 5.5 basis points to 4.50%.

The beginning of June brings the potential for more clarity on the U.S. economic front, with the national PMI report set for Monday and the national employment report for Friday. If the data confirms a weakening economy and hints at lower interest rates, it could serve as a catalyst for bitcoin to surpass its previous all-time high above $73,000 set in March. Conversely, strong economic indicators could lead to a retest of the lows observed in May.