The bitcoin (BTC) price has started 2024 fantastically, under the inspiring leadership of the spot bitcoin ETFs. After a false start, the bitcoin price has risen to approximately $52,000, where the digital currency appears to be encountering resistance. That resistance could well lie in a few macroeconomic developments that are currently weighing on the market.
Economic developments are plaguing the bitcoin price?
For example, last week it was announced that American inflation is higher than initially thought. The consumer price index (CPI) came in at 3.1%, while a score of 2.9% was expected.
This reduces expectations about interest rate cuts from the US central bank in 2024. That is negative for the bitcoin price, because risk assets benefit from low interest rates.
With low interest rates, capital is cheaper, more new capital comes into circulation and eventually part of it ends up in bitcoin. Fortunately, spot bitcoin ETFs are performing fantastically.
For example, BlackRock is well on its way to overtaking MicroStrategy in terms of the amount of bitcoin. To date, the largest asset manager in the world has managed to withdraw 109,609 bitcoin from the market. MicroStrategy has 190,000 to purchase as of August 2020.
It seems only a matter of time before at least BlackRock and Fidelity catch up with Michael Saylor’s MicroStrategy. This development now seems to weigh more heavily on the bitcoin price than the aforementioned pieces of negative macroeconomic data.
Next Thursday will be crucial for the bitcoin price
Thursday promises to be a true macroeconomic holiday. The entire Thursday is filled with important dates for the Eurozone and the United States.
Among other things, we receive information about the health of the industry and service sector in both areas. In addition, we get the weekly unemployment claims for the United States.
The latter is important because the strong labor market has so far managed to protect the American economy from a recession.
However, if we look at the chart above, we see that the US labor market has been weakening since the first rate cut in March 2022 at the same rate as the average of the recession years from 1950 to 2010.
It is therefore still too early to say that a recession will no longer occur and, partly for that reason, next Thursday could well be crucial for the bitcoin price.
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2024-02-18 16:47:01
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