Bitcoin traders warn of a pullback; As U.S. inflation data approaches, Dogecoin leads majors slide

 According to one trading desk, cryptocurrency markets are predicted to stay unstable before Friday's U.S. inflation report.

Over the last day, cryptocurrency heavyweights saw a sharp decrease in value, with meme coins like dogecoin and shiba inu leading the dip.

For clues about the future of bitcoin, the market is awaiting Friday's U.S. PCE inflation data. Some analysts have pegged a decline to as low as $60,000.

With traders expecting Friday's Personal Consumption Expenditures inflation data in the United States and warning of additional drops in the price of bitcoin (BTC), some of the top cryptocurrencies dropped as much as 5% in a single day.

With losses of almost 5% each, meme coins Dogecoin (DOGE) and Shiba Inu (SHIB) led the market down. The biggest tokens excluding stablecoins, the CoinDesk 20 (CD20), dropped 1.6%, while XRP, Solana's SOL, and BNB Chain's BNB sank 2%.

Following a brief recovery to $70,000 at the beginning of the week, Bitcoin has been testing support at $67,000. After encouraging regulatory rulings last week, Ether (ETH) was one of the top performers; but, since Monday, it has fallen more than 5%.

Stronger-than-expected consumer optimism and sluggish Treasury sales are contributing to the pressure on the price of bitcoin, according to the trading desk of Japanese cryptocurrency exchange bitBank.

BitBank stated in an email that "the price will probably not exhibit any obvious direction until Friday's U.S. PCE release, and it might be a make-or-break event for bitcoin." "Bitcoin may lose almost half of its gains over the last two weeks and drop to approximately $65,000 if the inflation report is higher than anticipated."

The sentiment was also expressed by Alex Kuptsikevich, senior market analyst at FxPro: "In the most negative scenario, the price might roll back to $60,000." In a Telegram interview, he stated, "A more hopeful scenario indicates a slide to the $65K range, where the 50-day moving average rests."

The number increased 2.7% annually in March. The April reading is due tomorrow at 12:30 UTC.

In other places, Glassnode's on-chain analytics revealed indications of a resurgence in customer interest in bitcoin. After months of selling, long-term Bitcoin holders—those who have owned the asset for more than 155 days—have started to accumulate again for the first time since December 2023.

Conventional stock indices began to decline before the inflation estimate was released, which may have implications for the Federal Reserve's future interest rate path. Because rising interest rates impede market liquidity and result in asset sell-offs, investors have historically tended to become more pessimistic.