#USMayPCEInflationRisesTo4.1%HighestIn3Years

📉 4.1% PCE Inflation. Is Macro Pressure About to Hit Crypto

There is a chance that the US May PCE inflation will rise to 4.1%, which is the highest it has been in three years. This is the kind of news that traders need to pay attention to.

For me it is not about the inflation. It is about how much money's moving around.

In the crypto world how much money is moving around matters more than what people are saying.

If the PCE inflation is higher than expected the main worry is that the Fed will keep being tough on the economy for a time. When interest rates are high for a time it usually means that it is harder for people to get money and that puts pressure on risky investments like crypto.

The crypto market feels this pressure because people who are using borrowed money to invest react quickly to news about the economy.

That is the news scenario.

If inflation is high it could make people less willing to take risks the value of the dollar could go up. The crypto market could get very volatile again. If the prices of Bitcoin and other coins fall below a point it could lead to a lot of selling and make the prices fall even more.

There is another side to this story that traders often miss.

The market does not just react to numbers it reacts to what people expect to happen.

If everyone is already prepared for inflation news then it might not cause, as much of a sell-off as people think. Sometimes the market falls before the news comes out and then recovers after the news is released once people are not as worried anymore.

That is why I am paying attention to how the prices react, not the news.

Will Bitcoin be able to hold its price?

Will buyers be able to absorb the selling pressure?

Will the volatility go away quickly?

These are the things that will tell us what is really going on.

One possible good outcome is that inflation will go down later in the year and the market will think that this high inflation is just temporary.

The bad outcome is that inflation will stay high which will mean that interest rates will stay high for longer and that will push the crypto rally further into the future.

My plan now is to just wait and not make any emotional decisions based on what is happening with the economy.

When the market is volatile it can create opportunities. Only if you can stay calm and not make mistakes.

What do you think. Will high inflation cause the crypto market to fall or is the market already prepared for news?

#GateSquare #Inflation #crypto.