An analysis of the U.S. economy and its affects on Bitcoin‘s market behaviour reveals intriguing insights. Bitcoin, presently priced at $29,780, struggles to stay afloat above a one-month nadir amid the release of economic data confirming persistent growth in the U.S. economy. Market participants are responding to an almost definitive prospect of another interest rate increment by the Federal Reserve next week.
The U.S. Census Bureau’s retail sales report for June indicates some frailty. A mere 0.2% rise last month, in comparison to an anticipated 0.5% and May’s actual 0.5%, did little to boost confidence. Nonetheless, taking a closer look at the retail sales “control group”, which excludes some elements to offer a more accurate measure of consumer spending, reflects a more optimistic panorama.
The group surged by 0.6% in June, this is significantly more than double the pace in May and vastly surpasses the prediction for a 0.3% reduction. Joseph Brusuelas, the principal economist at RSM, hints at another triumph for the soft landing model. He highlights the annualized growth rate of 2.1% over a 3-month mean within the control group, implying a minor upward threat to their team’s prediction for Q2 GDP growth of 1.7%.
The outcome of the imminent meeting of the Federal Open Market Committee (FOMC) seems more or less finalized. Traders are now accounting for a 97.3% likelihood of yet another 0.25 basis point rate augmentation, as computed by the CME FedWatch Tool. This prompts careful inspection of the current Bitcoin scenario.
While Bitcoin, on the threshold of a significant upturn when it surged to a peak of $31,800 last Thursday, triggered by the favorable litigation verdict for Ripple’s XRP, it now languishes at the lower end of its recent price scale at $29,780.
This situation beckons pertinent questions. How will the pendulum of Bitcoin’s market position swing given these impending macroeconomic developments? Can the Cryptocurrency withstand yet another Federal Reserve rate hike? This scenario, while disquieting for market bulls, is an intriguing prospect for observers as they watch the effects of real-world economics on digital assets.
Source: Coindesk
