The encryption market has been rebounding since the Federal Reserve announced a 75 basis point increase in interest rates on Wednesday. On Thursday, the long-awaited second quarter gross domestic product (GDP) report of the United States was released, which was -0.9%, after a 1.6% decline in the first quarter. According to the analysis of the US Economic Bureau, the GDP growth rate has been lower than the 0.5% growth rate expected by economists. If the GDP data declines for the second consecutive quarter, it is generally considered to be a "technical recession", which may stimulate the rise of risky assets such as bitcoin.
Bitcoin has soared nearly 10% to $23500 in the past 24 hours, and top counterfeit currencies such as Ethereum, Polkadot (DOT) and polygon (matic) have all achieved double-digit gains in the past 24 hours, according to bitcoin data.
The US GDP report took "the decrease in private inventory investment, residential fixed investment, federal government expenditure, state and local government expenditure and non residential fixed investment was partially offset by the increase in exports and personal consumption expenditure" as the main driver of the decline.
The data in the second quarter intensified people's concerns about the U.S. economic recession. However, Fed chairman Jerome Powell said at a news conference on Wednesday that the United States did not enter recession because other factors such as the labor market showed strong economic signs.
Secure digital markets, a Toronto based digital asset brokerage company, said in its telegraph research channel: "after the FOMC raised interest rates by 75 basis points, bitcoin rose well, in line with expectations. Technically, we saw a very clean upward breakthrough. It began before the data, and saw institutions holding a large number of positions with the support of the Federal Reserve's more dovish position".
After several failed upward breakthroughs this month, bitcoin bulls ushered in "dawn" at the end of July.
Antoni trenchev, co-founder of cryptocurrency wallet NEXO, said in a research report: "the next time will be the real test of bitcoin's rediscovery of elasticity, because it doesn't care about the US inflation data this month, and it didn't shrink back when Tesla announced that it has sold most of its BTC (bitcoin) assets".
However, there are different views in the crypto community on whether the latest surge has enough momentum to maintain the rise, or whether there will be a significant retreat before the market fully recovers.
Micha ë l Van de Poppe, an encryption analyst, believes that BTC traders should not just act on the latest news, regardless of the economic situation. He said in his tweet: "now we know that the United States is in recession. Does this mean that we should adjust our trading strategy? No! The word recession does not mean any variables you can refer to".
At the same time, trader and analyst Gareth soloway believes that investors in risky assets will face a more difficult period, because the Fed's interest rate hike will inevitably lead to a more serious recession. His view was endorsed by the chain analyst material indicators, who also warned that "at the macro level, the worst has not yet come".
Author: Bitui Mary Liu