The inflation data according to the PCE index published by the U.S. Bureau of Labor Statistics (BLS) recorded a rate of 2.8% during the month of November, which was in line with market expectations. Although these numbers may appear stable on the surface, the real issue lies in the nature of this data, as it is classified as lagging data (Backward-Looking) and does not reflect the actual state of the economy in real time.
In contrast, data from Truflation, which relies on measuring inflation in real-time, indicates that PCE inflation peaked at 2.7% in November of last year, before experiencing a sharp and accelerating decline to 1.46% currently. This clear difference reinforces the hypothesis that BLS data may begin to show significant declines in the coming months, after catching up with actual economic reality.
What does this mean for high-risk markets?
Historically, any noticeable slowdown in inflation opens the door for more flexible monetary policies, which supports high-risk assets like stocks and cryptocurrencies. However, the problem is that markets do not always move according to official data, but rather according to investor expectations and their preemptive reactions.
And here we move to the cryptocurrency market, specifically Bitcoin.
Bitcoin is at a critical crossroads
Before the New York session opened, a noticeable increase in leveraged long positions on Bitcoin was observed at a very sensitive timing. The price is still moving below the major moving averages on the four-hour timeframe, specifically within the range of 90,600 – 92,300 dollars, which is a historically strong resistance area.
Intensive buying at these levels is considered a high-risk gamble, especially as markets await inflation data. These buying positions rely almost entirely on the intervention of spot buyers to support the price, and in the absence of this support, we may witness a harsh corrective scenario.
