Bitcoin Braces for Core PCE Data as Put Premiums Signal Bearish Sentiment
Bitcoin markets show heightened bearish sentiment as one-week put options command a near 25-point premium over calls, reminiscent of early February when BTC found a bottom above $60,000. The trigger for a potential reversal could be the U.S. core PCE inflation data due Thursday, expected to rise 3.4% year-on-year for May. A softer reading might cool inflation fears and reduce the case for Fed rate hikes, sparking a bullish snap-back. Bitcoin has already rebounded to $61,500 from a 20-month low near $59,000. Both core and headline readings may be considered stale given recent oil price slides to $70, raising questions about whether May marks peak inflation. Economist Mohamed El-Erian notes the debate centers on how outdated these numbers are, especially after oil's decline. Beyond inflation, volatility is expected in Strategy's shares (MSTR and STRC) and AI stocks, with MSTR showing a bearish head-and-shoulders pattern that confirmed a breakdown on Wednesday with an 8% drop.
Key facts
- Bitcoin one-week put premium over calls reaches 25 points, similar to early February bottom.
- U.S. core PCE expected at 3.4% for May; softer reading could trigger bullish reversal.
- Bitcoin rebounds to $61,500 from $59,000 low; oil price drop may make data stale.
- Strategy's MSTR stock breaks down from head-and-shoulders pattern, falling 8% on Wednesday.