As the US first-quarter growth rate turns negative and employment growth sharply declines, the possibility of a Federal Reserve rate cut is increasing, and accordingly, the cryptocurrency market, including Bitcoin, is seeking a rebound opportunity.
According to TheBlock on the 30th (local time), experts predict that an accommodative monetary policy can create a macroeconomic environment favorable to Bitcoin by expanding liquidity.
According to the ADP employment indicator, US private sector employment increased by 62,000 in April, significantly below the expected 108,000, and much lower than the 147,000 in March. On the same day, the GDP decreased by 0.3%, recording negative growth for the first time since 2022. Meanwhile, the Personal Consumption Expenditures (PCE) price index, the Fed's preferred inflation measure, rose similarly to predictions, showing a somewhat calming inflation.
Accordingly, expectations are growing that the Federal Reserve may implement a rate cut at its monetary policy meeting scheduled for May 6-7. David Hernandez, an investment expert at 21Shares, stated, "The current market is reflecting the possibility of more than four rate cuts within the year," and analyzed that "the Fed's policy direction amid the complex situation of inflation easing and economic slowdown will be key to future market volatility."
Dr. Kirill Kretov of CoinPanel explained, "When interest rates decrease, a simultaneous occurrence of dollar weakness, liquidity expansion, and declining government bond yields creates a favorable environment for risk assets, including Bitcoin." He added, "Especially Bitcoin is currently in a low liquidity state, so even a slight inflow of funds can cause a significant price rebound."
Bitcoin temporarily dropped below $94,000 immediately after the economic indicator release, and major altcoins such as Ethereum (ETH) and Solana (SOL) also fell by more than 4%. However, the market showed some recovery afterward, and investors' attention is focused on the results of the Federal Reserve's May meeting.
This data is expected to be a critical turning point in assessing how quickly and strongly the Federal Reserve will move towards an accommodative policy in the coming months. The cryptocurrency market is anticipated to be sensitive to future interest rate decisions and changes in dollar liquidity.
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