Bitcoin Derivatives Market Sees Rising Fear, Core PCE Could Be Key Catalyst

Odaily Odaily reports that risk appetite in the Bitcoin derivatives market has notably weakened, with investors paying high premiums to hedge against downside risk. Overall market sentiment is approaching the panic zone. Institutional analysts point out that the core catalyst for a short-term market recovery will be the US May Core PCE Price Index, released at 8:30 AM Eastern Time.

The market consensus forecasts the May Core PCE year-over-year increase to be 3.4%, a slight uptick from April's 3.3%, marking the highest level since the end of 2023. As the Federal Reserve's primary inflation gauge, if the actual data comes in lower than market expectations, it would reinforce the market narrative of a sustained cooling of inflation and diminish the possibility of further Fed rate hikes. Improved liquidity expectations could then quickly restore sentiment for risk assets like Bitcoin, potentially triggering a sentiment-driven rebound rally. (Coindesk)