Key Points
- Bitcoin (BTC) value fell below $62,000 as US macro data unsettled markets.
- Surprisingly low US Q1 GDP data and rising prices highlighted difficulties in controlling inflation.
Bitcoin’s value dropped below $62,000 during the April 25 Wall Street opening. This was due to unsettling US macro data described as “stagflationary”.
Implications of the Federal Rate Cuts
The newest data showed a multi-day low of $62,785 on Bitstamp. This coincided with troubled market sentiment as the US Q1 GDP was significantly lower than expected at 1.6%.
Simultaneously, prices rose more than anticipated, emphasizing the complex task of managing inflation before the Federal Reserve.
Trading resource The Kobeissi Letter questioned whether the economy is starting to weaken, noting the unexpected nature of the GDP data. It was nearly 50% lower than a forecast by Goldman Sachs.
The market was already reducing the odds of economic policy loosening by the Federal Reserve on that day. It no longer fully anticipated an interest rate cut earlier than December.
The latest data from CME Group’s FedWatch Tool showed just a 6.3% chance of a rate cut at the next Federal Open Market Committee (FOMC) meeting, scheduled for May 1.
Bitcoin and US Equities
Bitcoin followed US equities, particularly tech stocks, downhill, struggling to maintain ground regained the previous week after a geopolitically-induced dip below $60,000.
However, not everyone was preparing for losses. Popular trader Crypto Chase suggested that Bitcoin could increase to top out at $68,000.
Analyst Caleb Franzen stated that the short-term holder (STH) realized price, currently at $59,530, formed the definitive line in the sand. If Bitcoin falls below this, he would become bearish.