Crypto Prices Rise Following Robust US Economic Data - Here’s Why Bullish Momentum Can Continue
Crypto Prices Rise Following Robust US Economic Data – Here’s Why Bullish Momentum Can Continue
Author Joel Frank Author Joel Frank About Author Since graduating with a degree in economics from the University of Birmingham in 2018, Joel has worked as a financial market/cryptocurrency analyst. He firmly believes that emerging crypto technology... Author Profile Share Copied Last updated: August 29, 2024 14:18 EDT
Why Trust Cryptonews With over a decade of crypto coverage, Cryptonews delivers authoritative insights you can rely on. Our veteran team of journalists and analysts combines in-depth market knowledge with hands-on testing of blockchain technologies. We maintain strict editorial standards , ensuring factual accuracy and impartial reporting on both established cryptocurrencies and emerging projects. Our longstanding presence in the industry and commitment to quality journalism make Cryptonews a trusted source in the dynamic world of digital assets. Read more about Cryptonews
Major crypto prices are trading in the green on Thursday in wake of US economic data that showed slowing inflation and a stronger-than-expected economy in Q2 and amid relief in wake of a strong Nvidia earnings report.
Bitcoin (BTC) and Ethereum (ETH) were both up 2-3% in the past 24 hours, per CoinMarketCap, and leading the rally in crypto prices.
BTC was last back in the mid-$60,000, while ETH was nearing $2,600.
Other major coins like Dogecoin (DOGE), Tron (TRX), Cardano (ADA) and Avalanche (AVAX) were up a similar margin.
The annualized rate of US GDP growth in Q2 was revised up to 3.0% from 2.8%.
2Q US GDP Revised up to 3% from 2.8% pic.twitter.com/SHrPBsLRBA — Michael McDonough (@M_McDonough) August 29, 2024
Q2 inflation measures were also downwardly revised.
#Inflation is so yesterday's news!
US GDP growth was revised upward, driven by a significant upward revision of consumer spending. That's not what a #recession looks like, right?
Less inflation + decent growth ≠ stagflation pic.twitter.com/J4aIovDyif — jeroen blokland (@jsblokland) August 29, 2024
The combination of lower inflation and stronger growth was interpreted by analysts of raising the chance that the US economy avoids recession.
The latest Nvidia earnings report, while disappointing some of the over-expectant bulls, was very robust and signaled strong momentum in the AI boom.
🚨BREAKING: NVIDIA BEATS EARNINGS.
– EPS: $0.68 vs. $0.65 expected
– Revenue: $30B vs. $28.9B expected
ALSO BREAKING: THE WORLD WILL NOT COLLAPSE. pic.twitter.com/nq8Y98TRdm — Genevieve Roch-Decter, CFA (@GRDecter) August 28, 2024
That explains why US equities have pumped on Thursday, with the S&P 500 up 1.0% and the Nasdaq 100 up 1.5%, per TradingView.
These macro tailwinds likely explain the strength in crypto prices on Thursday.
But can the momentum continue?
Can Positive Momentum in Crypto Prices Continue?
Thursday’s rise in crypto prices still leaves most major coins substantially lower for the week.
Bitcoin fell from above $64,000 on Monday, after all.
Traders are thus asking, can crypto prices erase their weekly losses.
Well, some of that will depend on Friday’s US Core PCE inflation data. The data is expected to support expectations that the Fed starts cutting interest rates next month.
While the likelihood that the Fed kicks off rate cuts with a 50bps reduction have slipped recently, the start of a series of interest rate cuts should be bullish for the market.
That’s assuming the US economy remains on track to not slide into recession.
While crypto prices might not be able to erase losses this week, September could be a good month.
US politics, of course, remains a major wild card. Crypto markets have responded positively recently to developments that raise Donald Trump’s chances of winning the November election.
He has come out as the more staunchly pro-crypto candidate.
Polymarket betters currently price a 50% chance he wins, versus a 48% chance that Democrat nominee and sitting VP Kamala Harris wins.
Trump's lead is up to 2% in the odds. pic.twitter.com/B64w2YNTVZ — Polymarket (@Polymarket) August 28, 2024
September could see all sorts of twists and turns in the race, with a debate between the two candidates coming up.
Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.