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

BlockBeats reports that on May 1, according to TheBlock, Bitcoin briefly fell below the $94,000 mark on Wednesday following the release of U.S. macroeconomic data, with an intraday decline of 1%. Major altcoins like Ethereum and Solana also fell in tandem, with the total cryptocurrency market cap retreating nearly 4%. The U.S. economy contracted by 0.3% in the first quarter, below the expected growth of 0.2%. The core PCE for March rose 2.6% year-on-year, matching expectations but below the revised February figure of 3.0%. In April, ADP employment added 62,000 jobs, a significant drop from March's 147,000.

21Shares crypto investment expert David Hernandez pointed out, "Federal funds futures indicate that the market now 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."

CoinPanel senior automation expert Kirill Kretov 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 drive prices up significantly." The market generally believes that weak economic data may force the Federal Reserve to start an easing cycle earlier than anticipated.