Bitcoin Drops Despite Positive U.S. Economic Data

user avatar

by Giorgi Kostiuk

2 years ago

Made with AI

  1. A Favorable Macroeconomic Context
  2. Decoupling Indicates Risk Aversion
  3. Arthur Hayes' Analysis


    4. Bitcoin failed to capitalize on the latest U.S. economic data. Despite an expected slowdown in inflation, the leading cryptocurrency fell by over 3% this Wednesday, dropping below the $56,000 mark.

    A Favorable Macroeconomic Context

    The Consumer Price Index (CPI) in the United States increased by 2.5% year-on-year in August, the smallest rise since February 2021. This data, published by the Bureau of Labor Statistics, confirms a moderation in inflation in line with economists’ forecasts.

    Paradoxically, this news was not enough to support Bitcoin’s price. The flagship cryptocurrency thus fell below $56,000, ignoring what could have been perceived as a positive signal for risk assets. Traders appear to have already priced in these expectations.

    Decoupling Indicates Risk Aversion

    CryptoQuant’s analysis platform highlights an alarming phenomenon in its latest report: the decoupling between Bitcoin and gold.

    "*A period of negative correlation between Bitcoin and gold, with a rise in gold prices and a fall in Bitcoin, generally signals a risk-averse environment*", explains the analyst.

    This trend is part of a broader context where even the weakening of the dollar is failing to support Bitcoin’s price. CryptoQuant interprets this situation as a sign of “*broader risk aversion or financial stress*” in global markets.

    A period of negative correlation between Bitcoin and gold, with a rise in gold prices and a fall in Bitcoin, generally signals a risk-averse environment.None

    Arthur Hayes' Analysis

    Arthur Hayes, former CEO of BitMEX, provides further insight into this paradox. According to him, the anticipated Fed rate cut might actually be a bad omen for Bitcoin. This analysis suggests that investors might perceive the accommodative monetary policy as a sign of economic weakness rather than an investment opportunity.

    The number of factors affecting Bitcoin's price continues to grow. Despite relatively positive macroeconomic data, the leading cryptocurrency continues to show a decline. This indicates a possible change in investor sentiment and their perception of the current economic situation.

Tier I

Sector: #18291

Sealed Hiding Place Room

Resource Cache

Resource Cache

Tier I

Requires 25% Tier Progress to Claim
Meme Cache

Meme Cache

Tier I

Requires 50% Tier Progress to Claim
Equipment Cache

Equipment Cache

Tier I

Requires 75% Tier Progress to Claim

After collecting, hiding places will be stored in your inventory and can be opened with Keys.

Other news

Walt Introduces Standalone Android App for Cryptocurrency Trading

Walt has launched a standalone Android app for cryptocurrency trading, allowing users to sign up without a Telegram account.

user avatarEmily Carter

Charles Schwab Expands Crypto Trading Menu with New Altcoins

Charles Schwab has expanded its crypto trading menu to include Solana, Avalanche, and Chainlink, allowing eligible clients to trade a wider range of cryptocurrencies.

user avatarTomas Novak

24X and Standard Chartered Enhance Partnership for Institutional Crypto Trading

24X Bermuda expands its partnership with Standard Chartered to facilitate institutional trading of Bitcoin and Ether, enhancing access to cryptocurrency and foreign exchange.

user avatarKaterina Papadopoulou

Strategy's Dual Approach: Bitcoin Acquisition and Preferred Share Repurchase

On November 9, Strategy announced the acquisition of 1,036 additional Bitcoin alongside the repurchase of approximately 188 million STRC preferred shares.

user avatarMaya Lundqvist

Bitcoin Slips Toward $74,000 After Fed Governor Signals December Rate Hike

Bitcoin's value has dropped significantly, approaching the $74,000 level, as Federal Reserve Governor Christopher Waller voiced clear support for raising interest rates at the upcoming December FOMC meeting.

user avatarLeo van der Veen

MARA Reports Significant Bitcoin Sales and Loan Repayment

MARA disclosed significant Bitcoin sales and loan repayment, marking a strategic shift from holding to monetizing reserves.

user avatarLi Weicheng

Important disclaimer: The information presented on the Dapp.Expert portal is intended solely for informational purposes and does not constitute an investment recommendation or a guide to action in the field of cryptocurrencies. The Dapp.Expert team is not responsible for any potential losses or missed profits associated with the use of materials published on the site. Before making investment decisions in cryptocurrencies, we recommend consulting a qualified financial advisor.