The Bitcoin price broke above $ 25,000 on February 21, marking a plus of 53 percent for the year 2023. At that point, it would have been logical to expect the rally to continue.
US retail sales came in ahead of expectations, meaning the economy is strong and a recession is likely to be avoided.
Soft landing
The Federal Reserve raised US interest rates by a total of 4.50 percent from March 2022. Many had expected that the economy would suffer and not survive. However, more and more economic data tells us that the economy is more resilient than expected. The positive retail sales also strengthen the narrative for a ‘soft landing’.
We speak of a soft landing if the Federal Reserve manages to keep the economy out of recession despite the rate hikes. Then the Federal Reserve makes a soft and safe landing, as it were. A hard landing would be a minor recession and the market is of course not looking forward to a crash.
In the long run, however, it still seems like a miracle is needed for the Federal Reserve to keep interest rates at these relatively high levels longer, wind down its $9 trillion balance sheet, and do so without significantly damaging the economy. “If that miracle succeeds, it would benefit risk assets such as stocks, commodities and Bitcoin,” thus Marcel Pechman of Cointelegraph.
Chinese USD Coin Premium
It seems that China and Asia are currently big buyers in the market for Bitcoin and other cryptocurrencies. We see this in the USD Coin Premium, among other things. This index measures the difference between peer-to-peer stablecoin trades in China and the US dollar.
