Weak U.S. Economic Data May Prompt Fed to Turn Dovish, Benefiting Bitcoin

According to a report by Jinse Finance, Bitcoin briefly fell below the $94,000 mark on Wednesday after the release of U.S. macroeconomic data, with a daily decline of 1%. Major altcoins like Ethereum and Solana also fell in tandem, with the total cryptocurrency market value retracting nearly 4%. The U.S. economy contracted by 0.3% in the first quarter, below the expected growth of 0.2%. The core PCE in March rose by 2.6% year-on-year, matching expectations but lower than the revised February figure of 3.0%. In April, ADP employment added 62,000 jobs, a significant drop from March's 147,000. David Hernandez, a crypto investment expert at 21Shares, pointed out: "Federal funds futures now show that the market expects the Federal Reserve to cut rates more than four times this year. In the context of slowing inflation and signs of economic recession, policymakers' balancing act will be key to market trends in the coming weeks." Kirill Kretov, a senior automation expert at CoinPanel, believes that rate cuts will benefit Bitcoin through a triple mechanism: a weaker dollar, improved liquidity, and declining Treasury yields. "The -0.3% GDP data, combined with President Trump's increased pressure on the Federal Reserve, significantly raises the probability of a dovish policy shift. In the current context of thin Bitcoin liquidity, even moderate capital inflows could lead to a substantial price increase." The market generally believes that weak economic data may force the Federal Reserve to start an easing cycle earlier.