Bitcoin’s bull run encountered another setback last night, with the price falling to around $58,400. Fear has returned to the market, particularly among bitcoin miners, as Mt. Gox prepares to reimburse its creditors with $8.5 billion in bitcoin.
Meanwhile, uncertainty surrounds the macroeconomic landscape, with conflicting data casting doubt on the strength of the economy and the likelihood of interest rate cuts. The Federal Reserve’s decision on interest rates is anxiously awaited, with some speculating that a cut could occur in the near future.
Despite positive US economic data in recent weeks, including lower-than-expected inflation, weakening labor market, and lower retail sales, Friday’s PMI reports showed unexpected gains in the manufacturing and services sectors. Thursday and Friday will bring new estimates of GDP and the PCE Price Index, key indicators that could influence the Fed’s decision on interest rates.
For bitcoin, a cautious weakening of the economy and lower-than-expected inflation could reinforce the narrative that the US economy is slowing down, leading to interest rate cuts. This could be a positive development for bitcoin, as it would align with the market’s expectations and potentially boost sentiment.