Market sentiment remained subdued on Friday as traders awaited the release of the core PCE data, a crucial inflation gauge that could shape upcoming Federal Reserve rate decisions.
The cryptocurrency sector mirrored this cautious mood, with XRP slipping below key support levels amid broader losses in bitcoin and other major tokens. XRP, known for its focus on payments, fell beneath its 200-day simple moving average (SMA) for the first time since April 10, signaling a strengthening bearish trend. The token dropped below $2.20, down approximately 4.6% over the past 24 hours, according to TradingView.
This downturn came despite reports indicating growing corporate demand for XRP as a Treasury asset.
Bitcoin, the largest digital currency by market capitalization, also faced pressure, briefly dipping below $105,000 during European trading hours. This extended overnight losses to nearly 3% on a daily basis.
Bitcoin’s decline coincided with a $358 million net outflow from 11 spot bitcoin exchange-traded funds (ETFs) on Thursday — the first such outflow since May 13 and the largest single-day withdrawal since March 11, per SoSoValue data. Additionally, renewed concerns about a potential trade war further dampened investor confidence.
Other major cryptocurrencies, including Ethereum (ETH), Solana (SOL), and Dogecoin (DOGE), experienced sharper declines. Smaller altcoins such as Optimism (OP), Arbitrum (ARB), Bonk (BONK), and Pepe (PEPE) suffered losses exceeding 10%, based on figures from Coingecko.
Focus Shifts to U.S. Core PCE
The personal consumption expenditure (PCE) index, a key measure of consumer prices, rose by 0.15% month-over-month in April. This nudged the annual inflation rate down slightly to 2.2% from March’s 2.3%, according to economists polled by FactSet.
The core PCE, which excludes volatile food and energy prices and is the Federal Reserve’s preferred inflation metric, is expected to have increased by 0.12% for the month and 2.5% annually.
Should inflation data continue to show moderation, expectations of Federal Reserve rate cuts may gain momentum, potentially boosting bitcoin and other digital assets.
“Attention is now squarely on the Core PCE release due today, which could spark renewed bullishness if inflation signals further easing,” noted Valentin Fournier, Lead Research Analyst at BRN, in a recent email.
