As Bitcoin’s price teeters around the $106,000 mark, experts are evaluating the connections between the crypto market and US economic indicators. A greater-than-expected fall in Q4 GDP pushed Bitcoin’s price up 2% due to its tendency to move in the opposite direction to traditional market indicators.
The 2.3% GDP growth in Q4 fell shy of the predicted 2.5%. Crypto analysts noted several instant market responses to this information, including a drop in dollar yield, increasing altcoin values, and a rise in the value of Bitcoin against Ethereum. Some analysts suggest this trend will continue for some time, with shifting dynamics in the cryptocurrency market.
The S&P 500 and Nasdaq Composite Index both started the day up around 0.5%, while the US dollar index experienced a brief drop. Prominent crypto commentator Seth used this context to advocate for lower interest rates and increased stimulus as a method to counteract the dipping GDP figures.
These figures increased pressure on the Federal Reserve, as recent decisions to refrain from interest rate cuts have been widely criticised. Consequently, expectations surrounding a potential rate cut at the next Federal Reserve meeting in March sit at a mere 18%. Analysts will also be paying close attention to initial and continuing jobless claims, which fell short of projections.
Positive movement in Bitcoin’s price has been noted, with experts suggesting a potential breakout beyond its current level. A strong Bitcoin market could also provide a needed boost for other cryptocurrencies. Other traders have described Bitcoin’s recent behavior as a “textbook” example of price performance, with one analyst anticipating a major shift if the value surpasses $106,500.