A brisk slowdown in GDP fails to offer any direction for crypto markets, with Bitcoin slowly clawing back lost ground below $30,000.
Market Update
Bitcoin (BTC) stuck to $29,000 at the April 27 Wall Street open as United States gross domestic product (GDP) growth missed expectations.
U.S. GDP figures reveal surprise slowdown
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD once again stagnant after flash volatility the day prior.
The largest cryptocurrency had liquidated over $300 million in long and short positions after a snap correction over claims that Mt. Gox and U.S. government Bitcoin had left their wallets.
A subsequent rebound rescued some of the losses, but $30,000 remained out of reach as macro data failed to offer a suitable catalyst.
This came in the form of GDP growth, which at 1.1% fell far short of predictions.
US economy is losing steam: The US GDP grew 1.1% in Q1 2023 ann, slower than the expected 1.9% & slower than previous quarter (2.6%). The main drag came from significantly lower inventory accumulation, while private consumption remained strong. pic.twitter.com/ezpuHeJuNC
— Holger Zschaepitz (@Schuldensuehner) April 27, 2023
“Growth expectations are falling fast,” financial commentator Tedtalksmacro wrote in part of Twitter follow-up.
Gold bug Peter Schiff, chief economist and global strategist at Europac, predicted that inflation would endure at the hands of the Federal Reserve, which next week is due to decide on the next changes in interest rates.
“Today’s 1.1% Q1 #GDP growth confirms the economy is getting weaker as inflation is getting stronger,” he summarized.
“The Fed has already lost its war against inflation. Inflation won and the U.S. economy lost. The Fed’s next move will be to ‘rescue’ the economy by creating even more inflation.”
Market expectations for a 0.25% rate hike in May remained unchanged versus the start of the week as a result of the GDP data, according to CME Group’s FedWatch Tool, with the odds remaining at 85%.
Bitcoin price recovers from “ultra nasty correction”
Turning to Bitcoin, traders’ BTC price targets for the short term were decidedly conservative.
Related: Bitcoin price can ‘easily’ hit $20K in next 4 months — Philip Swift
Michaël van de Poppe, founder and CEO of trading firm Eight, highlighted upside and downside levels close to spot price.
“Ultra nasty correction on Bitcoin, causing a chain reaction on altcoins too,” he told Twitter followers.
“Levels are quite clear, as Bitcoin is still at $29,000. Needs to hold $28,200 for potential longs. Breaking and flipping $29,200 is continuation towards the highs.”
Daan Crypto Trades, meanwhile, noted that BTC/USD had practically come full circle in 24 hours, with leverage flushed from the system.
“Yesterday we saw some massive squeezes towards both sides, completely flushing out all the high leverage,” he commented alongside an explanatory chart.
“Since then, price is about where it was before the first short squeeze but open interest has not come close to recovering. Low leverage currently. Slight spot premium.”
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
