The recent US PCE inflation data has sparked mixed reactions in the market, with Bitcoin's price initially recovering before paring gains. Despite the slight recovery, investors are still seeking clarity on potential rate cuts by the Federal Reserve.

The US PCE inflation data for April showed a 0.3% increase, in line with market expectations. On a year-over-year basis, the PCE inflation came in at 2.7%. The Core PCE inflation, excluding food and energy prices, cooled to 0.2%, while the annual core PCE inflation remained at 2.8%. Although the Core PCE cooled last month, the inflation level still remains higher than anticipated, dampening investor sentiment.

The traders are seeking clarity on potential rate cuts by the Federal Reserve, as higher policy rates have dampened the risk-bet appetite of market participants. The Bitcoin price initially soared 0.95% to $68,773 following the PCE inflation release, but later pared gains due to a weak chart pattern amid Mt. Gox payout and DMM Bitcoin hack risks, falling to a low of $66.8K.

The US 10-year Bond Yield slipped 0.73% to 4.515, while the US Dollar Index Futures fell 0.27% to $104.380. The latest PCE data has further fueled concerns over a dovish stance by the Federal Reserve. According to the CME FedWatch Tool, there is a 99% probability that the Federal Reserve will not make any changes to its policy rates at its upcoming June meeting. However, a new all-time high could coincide with rate cuts later this year.

Matrixport co-founder Daniel Yan highlighted the significance of the Personal Consumption Expenditures (PCE) data for April. In a social media post, Yan stated that a 0.2% month-on-month increase for both Core PCE and PCE would be bullish for the market, while a 0.3% increase would be bearish. If one measure is at 0.2% and the other at 0.3%, Yan indicated a neutral outlook.