Weak US economic data may prompt the Fed to shift to a dovish stance, potentially benefiting Bitcoin

BlockBeats News, May 1st, according to TheBlock, on Wednesday after the release of US macroeconomic data, Bitcoin once fell below the $94,000 mark, with an intraday decline of 1%. Ethereum, Solana, and other major altcoins also fell in sync, with the total cryptocurrency market cap retracting nearly 4%. The US economy contracted by 0.3% in the first quarter, below the expected growth of 0.2%. The year-on-year core PCE in March rose by 2.6%, in line with expectations but below the revised value of 3.0% in February. In April, ADP nonfarm payrolls added 62,000 positions, a significant decrease from March's 147,000.

21Shares crypto investment expert David Hernandez pointed out: "Federal Funds futures show that the market now expects the Fed to cut interest rates more than 4 times this year. Against the backdrop of simultaneous signals of slowing inflation and economic recession, policymakers' balancing act will be key to the market trend in the coming weeks."

CoinPanel's senior automation expert, Kirill Kretov, believes that interest rate cuts will benefit Bitcoin through a triple mechanism: a weakening US dollar, improved liquidity, and a decline in bond yields. "The -0.3% GDP data overlaid with President Trump's increased pressure on the Fed significantly raises the probability of a policy shift towards dovishness. In the current context of thin Bitcoin liquidity, even mild inflows of funds could potentially drive prices significantly higher." The market generally believes that weak economic data may force the Fed to start an easing cycle earlier than expected.