As US GDP growth falls short of expectations, Bitcoin struggles to regain lost ground below $30,000.
- Bitcoin is unable to gain traction and is stuck at $29,000.
- At 1.1%, the U.S. GDP growth is significantly below expectations, signaling weaker economic conditions and rising inflation.
- The market still anticipates a 0.25 percent rate increase in May (85%).
Introduction
After a notable 7% decline, the cryptocurrency industry, and notably Bitcoin, is still showing signs of a sluggish rebound. The increase of the US gross domestic product (GDP) has fallen short of market estimates.
Stagnant Bitcoin Price as US GDP Figures Reveal Surprise Slowdown
Following a period of flash volatility on April 27, the price of Bitcoin remained unchanged at $29,000 during the opening of Wall Street. According to recent market statistics, the largest cryptocurrency had experienced a significant drop that led to the liquidation of over $300 million in long and short positions. Despite a subsequent recovery, Bitcoin was unable to achieve $30,000 because macroeconomic indicators like GDP growth fell short of acting as a meaningful stimulus. The 1.1% GDP growth in Q1 fell considerably short of forecasts, raising questions about the state of the economy as a whole.
Expert Opinions on Economic Growth and Inflation
A worsening economy is indicated by the sharp fall in growth forecasts, according to financial pundit Tedtalksmacro. Peter Schiff, a well-known proponent of gold and economist, stressed that the Federal Reserve’s activities will result in continued inflation. To “rescue” the economy, Schiff projected that the central bank’s next action would involve increasing inflation. These points of view imply that inflationary pressures are a big worry and may affect the Federal Reserve’s interest rate decisions.
Market Expectations and Potential Rate Hike
According to CME Group’s FedWatch Tool, market expectations for a 0.25% rate hike in May remained constant despite the weak GDP numbers, with the probabilities maintained at 85%. This suggests that despite the weak economic growth, market participants still expect the Fed to tighten monetary policy. The direction of the economy and perhaps even the cryptocurrency market will be determined by the Federal Reserve’s impending interest rate decision.
Bitcoin’s Recovery Efforts and Short-Term Price Targets
Short-term price targets for Bitcoin were conservatively established by traders as the cryptocurrency tried to recover from a recent slump. The founder and CEO of the trading firm Eight, Michal van de Poppe, identified critical levels close to the current spot price and emphasized the necessity of Bitcoin holding at $28,200 to support possible long bets. A price increase would be indicated by breaking and flipping $29,200. With leverage being removed from the system, another analyst, Daan Crypto Trades, noticed that Bitcoin has almost reached its pre-dip price in just 24 hours. This observation shows that speculative trading has decreased and the market has stabilized.
Conclusion
The recent slowdown in US GDP growth hasn’t been able to give Bitcoin or the cryptocurrency market, in general, a clear direction. Bitcoin struggled to break the $30,000 mark despite making an effort to recover from a substantial decline. Expert viewpoints raise concerns about the economy’s deterioration and the endurance of inflation. Participants in the market will be paying close attention to the Federal Reserve’s next interest rate decision because it could have an impact on the economy’s trajectory and the state of the cryptocurrency market. The immediate goal of Bitcoin’s recovery attempts is to hold important support levels and pursue higher price targets. The interaction of economic variables with cryptocurrency performance demonstrates the continued complexity and connectivity of financial markets.
