What To Expect From Crypto Market Ahead of US GDP Data Release

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Coingapestaff

Coingapestaff

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What To Expect From Crypto Market Ahead of US GDP Data Release

Highlights

  • Crypto market weakens as traders await the US GDP and signals
  • Extreme fear and rising liquidations signal heightened macro-driven volatility
  • GDP and inflation data could shape Fed outlook and direction

The crypto market declined 1.7% in the past 24 hours, dropping to a total capitalization of $2.97 trillion. The correction follows the release of the most recent data on the US GDP, which will provide insight into the economic growth in the third quarter. The market volatility is increasing, and Bitcoin, Ethereum, and XRP continue to extend their losses.

Bitcoin (BTC) price fell 1.8% to $87,353, staying below the $88,000 mark. Ethereum price hovered below $3,000, while XRP slipped below $2. 

Other major cryptocurrencies like ADA, BNB, and DOGE are consolidating near key support zones. This market chill is indicative of wider panic, with traders looking forward to macroeconomic information this week.

The crypto market sentiment is weak. The Crypto Fear & Greed Index fell to 24, which is the extreme fear. The liquidations rose 11% to 222 million within 24 hours, with increased sensitivity to news. In the meantime, the total crypto derivative open interest expanded by 1.1% to 129 billion.

Crypto Market Retreats as Traders Brace for US GDP Data

The macroeconomic calendar in this week is full of crypto market events. Monday was a day that Federal Reserve infused money into the financial system to the tune of $6.8 billion.

The most important US GDP data will be on Tuesday, and on Wednesday, jobless claims will be included. Thursday is a market holiday, and the Chinese data on M2 money supply come in on Friday.

The US GDP will record annual growth of 3.2% in Q3 today. That is a little less than the previous 3.8 percent figure, but is nonetheless an indication of a robust rate of growth. According to analysts, this has the potential to affect the anticipation of the next move that will be made by the Federal Reserve.

Markets Focus on GDP Growth and Inflation Index

The US economy appears to be gaining momentum after contracting in Q1. A 3.2% growth rate would confirm steady recovery heading into year-end. The Bureau of Economic Analysis will also publish the GDP Price Index, an indicator of vital inflation, along with the GDP headline.

This index is used to measure inflation of all goods and services produced locally. It was 2.1% in Q2, compared to 3.8% in the first half of the year. This is a very important figure that the Federal Reserve keeps an eye on in policymaking. A weak value would affect subsequent rate determinations.

The GDPNow model of the Atlanta Fed indicates that the growth will be 3.5% in Q3, which is projected to be stronger than expected. But the index of the US Dollar has been weak before the release, indicating market reservations. 

The US GDP data are modifying positions that are being adjusted by investors on how the data would alter the direction of monetary policy.

Since the crypto market is still susceptible to macro data, the current release may produce new volatility. Traders will observe how the prices respond and whether the prices continue lower or there is a relief rally.

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Frequently Asked Questions (FAQs)

1. What is the expected US GDP growth rate for Q3?

US GDP is expected to show 3.2% annualized growth for the third quarter.

2. Why is the GDP Price Index important for markets?

It measures inflation across domestic goods and services and guides Federal Reserve policy decisions.
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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

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About Author
CoinGape comprises an experienced team of native content writers and editors working round the clock to cover news globally and present news as a fact rather than an opinion. CoinGape writers and reporters contributed to this article.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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