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Key points:
US GDP shrank in Q1, raising recession alarms while also prompting calls for Fed rate cuts.
Bitcoin dropped to $92,910 as GDP figures were released, but sustained buy-side demand could provide support.
Today’s crypto derisking is likely transitory; market fundamentals remain strong.
Bitcoin (BTC) price took an abrupt tumble as data showed the US gross domestic product (GDP) retracting by 0.3% in Q1, raising alarms among analysts anticipating a recession. Following the news, BTC price dropped to an intra-day low of $92,910, while the DOW and S&P 500 fell by 1% and 1.3% respectively.
While the GDP figures are shocking at face value, CNBC pointed out that the drop was primarily due to “a surge in imports ahead of President Donald Trump’s tariffs.” Imports are subtracted from GDP, suggesting that the pullback is more transitory than endemic.
After an initial 1% price drop, Bitcoin rebounded back to the $94,000 range as crypto and traditional markets digest today’s news headlines. Beyond the GDP figures, Bitcoin still has multiple positive factors that translate to a continued bid throughout its current price range.
Strong resistance at $95,000 remains, but BTC is holding a pattern of daily higher lows. The overhead resistance at $95,500 to $96,400 is also aligned with 61.8% Fibonacci retracement, which, in the view of technical analysis, tends to be an expected level of resistance.
BTC/USD Coinbase. Source: TradingViewBeyond today’s $41.47 million spike in Bitcoin long liquidations, spot volumes have driven the bulk of BTC bullish price action over the past two weeks, which is another positive.
BTC/USDT spot and futures cumulative volume delta. Source: TRDR.io Related: Bitcoin macro indicator that predicted 2022 bottom flashes ‘buy signal’
Bitcoin buy demand from all angles could provide price support
In the past two weeks, the Bitcoin market has seen:
Spot Bitcoin ETF inflows as of April 29 total $3.02 billion, with BlackRock’s IBIT being a leader among the pack.
An April 24 statement from the US Federal Reserve Board of Governors announced that banks can independently and freely move forward with offering crypto-based products and services
Investment banking firm Cantor Fitzgerald partnered with SoftBank, Tether and Bitfinex to launch a $3 billion Bitcoin acquisition company called 21 Capital.
Another $1.42 billion Bitcoin purchase from Strategy.
Coinbase institutional head of strategy John D’Agostino mentioned that sovereign entities made Bitcoin purchases during the sell-off below $75,000.
An increasing number of international companies are copying the “MicroStrategy playbook” by dipping their toes into the Bitcoin treasury game.
What is clear is that despite the shrinking US GDP triggering a news headline-driven correction, sustained demand on the buy side and strengthening market structure fundamentals are likely to trump today’s brief downside blip in BTC price.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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