Bitcoin (BTC) experienced a pullback on July 27, erasing the gains from the previous day, while macroeconomic data in the United States had a muted effect on the cryptocurrency’s price.
After reaching a brief peak of $29,680 just before the daily close, BTC’s strength started to fade, even though the Federal Reserve had already raised interest rates to their highest level since 2001, which had been anticipated by the markets.
On the same day, the U.S. gross domestic product (GDP) for Q2 exceeded expectations, growing at an annualized rate of 2.4%.
This result suggested that inflationary pressures were still subsiding, potentially benefiting risk asset performance.
Surprisingly, Bitcoin did not show a noticeable reaction to this positive economic data, and stocks remained fairly flat after the Wall Street open.
Michaël van de Poppe, the founder and CEO of trading firm Eight, expressed hope that the release of the July 28 Personal Consumption Expenditures (PCE) Index would provide a more concrete growth incentive.
He believed that a better-than-expected PCE could drive the markets higher.
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However, van de Poppe also cautioned that BTC/USD might experience a dip before any potential upward movement, with the critical support level now identified at $29,700.
On-chain monitoring resource Material Indicators had previously suggested that the GDP report would have little impact on the cryptocurrency market, labeling it a “nothingburger” for crypto.
An analysis of the BTC/USD order book on Binance indicated that there was thin support above $28,500, which could ease a market drop if one were to occur.
While the GDP data had little effect on market expectations for the next interest rate decision in September, the U.S. dollar strengthened to two-week highs on July 27.
The U.S. Dollar Index (DXY) reached 101.84, bouncing back from its lowest levels in over a year.
Financial commentator Tedtalksmacro noted that the rate hike event was rather unremarkable, as the markets were reacting as if it were just a step closer to a potential pause in rate hikes, leading to higher prices for both BTC and U.S. equities.
In conclusion, Bitcoin’s price showed some weakness despite positive macroeconomic data from the U.S., and the U.S. dollar strengthened on the same day.
Market participants were keeping a close eye on the upcoming PCE Index release to assess its impact on asset performance.
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