Bitcoin BTC/USD fell almost 6% lower Friday morning in tandem with the general market after the Bureau of Economic Analysis reported a 5.4% increase in the personal consumption expenditures (PCE) price index in the month of January.
The number came in well above the 4.9% estimate and above the 5.3% gain in December. The newest data shows inflation remains hot, although down from the 7% reading in June 2022. The higher-than-expected PCE data indicates the Federal Reserve may need to do more to hamper stubborn inflation, which could include steeper and additional rate hikes than what was previously expected.
Ethereum ETH/USD fell 4.55% before bouncing up slightly, while Dogecoin DOGE/USD struggled to rebound from its 5.21% early session loss.
The drop confirmed all three cryptos remain in downtrends, with all printing lower lows on Friday.
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The Bitcoin,Ethereum Charts: Bitcoin and Ethereum entered into downtrends over the second half of this month after enjoying large bullish runs to start 2023. Bitcoins most recent lower high was formed on Thursday at $24,600 and the most recent confirmed lower low was printed at the $23.581 mark the day prior. Ethereums most recent confirmed lower low was created on Wednesday at $1,594 and the most recent lower high was formed at the $1,679 mark on Thursday.
During Fridays 24-hour trading session, Bitcoin and Ethereum were working to print hammer candlesticks on the daily chart, with long lower wicks. Hammer candlesticks, when found in a downtrend, can indicate the next lower low is in and the stock or crypto will trade higher the following trading day.
The second most likely scenario is that Bitcoin and Ethereum will trade sideways to consolidate Fridays sharp decrease. If that happens, traders can watch for the cryptos to print a possible inside bar pattern, or a series of inside bars over the weekend.
Bitcoin has resistance above at $24,206 and $25,288 and support below at $22,719 and $21,313.
Ethereum has resistance above at $1,717 and $1,957 and support below at $1,564 and $1,421.
The Dogecoin Chart: Unlike Bitcoin and Ethereum, Dogecoin was struggling to bounce up from the low-of-day, which may cause the crypto to print a bearish Marubozu candestick. If that happens, Dogecoin could continue to fall lower on Saturday, or like Bitcoin and Ethereum, the crypto could print an inside bar to consolidate.
Dogecoinis trading in a downtrend, with the most recent lower high formed on Wednesday at $0.089 and the most recent confirmed lower low printed at the $0.082 level on that same day. The drop on Friday caused Dogecoin to break down bearishly from a triangle formation, which may spook bullish investors.
If Dogecoin continues to slide over the weekend, the crypto may find support at the 200-day simple moving average and reverse course off that level.
Dogecoin has resistance above at $0.083 and $0.091 and support below at $0.075 and at 7 cents.
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