The big question: can the major cryptocurrency hold key support to avoid falling to multi-month lows?"
On March 28, bitcoin went in search of a local bottom amid the release of US inflation data that came in above expectations. The BTC/USD asset headed towards the $84 000 mark after the opening of trading on Wall Street.
February's PCE data showed an acceleration in inflation - in contrast to the results a month earlier. While the monthly and annual PCE figures were in line with market forecasts (0.3% and 2.5% respectively), their core equivalents were 0.1% higher than expected.
"Core inflation is on the rise again," noted analyst resource The Kobeissi Letter in a report in X, adding that January's reading was also revised upward. Analysts said the current macroeconomic trajectory forms "the perfect recipe for stagflation in 2025."
March inflation data will be even more telling as the trade war continues," the publication noted.
Bitcoin price analysis shows "typical market cooling"
While bitcoin didn't seem to react to the inflation warning, market participants were prepared for surprises.
"PCE data is coming out soon, so I think it's going to be a volatile day in the markets," wrote trader Daan Crypto Trades on social network X.
Other analysts expressed doubts about the strength of the crypto market, agreeing that bitcoin is not yet out of the danger zone despite holding above $80 000 for several weeks.
"The trend for bitcoin remains upward but is starting to look a bit worse," trader, analyst and entrepreneur Michaël van de Poppe told his X subscribers. "The situation is shaky. Fall below $84 000 and I think we'll see a test of the $78 000-$80 000 levels and possibly lower before we start rising again."
Current market conditions point to a period of consolidation for bitcoin after recent gains. The key support level remains the $84 000 mark, a fall below which could lead to testing lower levels. Published inflation data creates additional pressure on the cryptocurrency market, which may affect the medium-term prospects of bitcoin.
Investors vote with the dollar: bitcoin ETFs show steady inflows for 10 days in a row
U.S. exchange-traded funds tracking the spot price of bitcoin continue to attract investors for the tenth consecutive day, the longest streak of inflows since last December.
"This indicates that although institutional investors are not showing aggressive risk appetite, there is still demand for bitcoin in the market," noted Presto Research analyst Min Jung.
According to data from SoSoValue, total net inflows into bitcoin ETFs totaled $89 million on March 27, led by Fidelity's FBTC fund with $97.14 million in inflows, while BlackRock's IBIT ETF attracted nearly $4 million.
On the other hand, investors withdrew nearly $7 million from Invesco's BTCO fund and nearly $5 million from WisdomTree's BTCW.
Moderate investor appetite
Despite the positive momentum, the volume of inflows over the past 10 trading days remains "relatively modest," emphasizes Presto's Jung.
The cryptocurrency market and the stock market as a whole experienced increased volatility and declines after US President Donald Trump announced a tough tariff policy on foreign countries.
While investors have partially regained confidence believing that Trump's tariffs will not be as sweeping, the ongoing shaping of this policy continues to weigh on market sentiment.
Over the ten-day period, $1.06 billion flowed into funds - less than the one-day inflow recorded on Jan. 17.
Bitcoin vs Ethereum: different confidence levels
The crypto analyst also drew attention to the divergence of flows between bitcoin-ETFs and Ethereum-ETFs. The latter has recorded net outflows almost every day since Feb. 20, with the exception of two days.
"This contrast highlights the clear difference in investor conviction between bitcoin and Ethereum", Jung said.
This difference in investor behavior may indicate a more conservative approach to alternative crypto assets in the face of market uncertainty. While bitcoin continues to attract capital even in the face of increased volatility, other cryptocurrencies are causing investors to be more cautious.
