Crypto Prices Rise Following Robust US Economic Data – Here’s Why Bullish Momentum Can Continue 

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Joel Frank

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Joel Frank

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Since graduating with a degree in economics from the University of Birmingham in 2018, Joel has worked as a financial market/cryptocurrency analyst. He firmly believes that emerging crypto technology...

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August 29, 2024 14:18 EDT

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Major crypto prices are trading in the green on Thursday, following US economic data showing slowing inflation and a stronger-than-expected economy in Q2 and relief following a strong Nvidia earnings report.

Bitcoin (BTC) and Ethereum (ETH) both went up 2-3% in the past 24 hours, per CoinMarketCap, leading the rally in crypto prices.

BTC was last back in the mid-$60,000, while ETH was nearing $2,600.

Other major coins, such as Dogecoin (DOGE), Tron (TRX), Cardano (ADA), and Avalanche (AVAX), were up by a similar margin.

The annualized rate of US GDP growth in Q2 was revised up to 3.0% from 2.8%.

Q2 inflation measures were also downwardly revised.

Analysts interpreted the combination of lower inflation and stronger growth as raising the chance that the US economy would avoid recession.

While the latest Nvidia earnings report disappointed some of the overly optimistic bulls, it was very robust and signaled strong momentum in the AI boom.

That explains why US equities have pumped on Thursday, with the S&P 500 up 1.0% and the Nasdaq 100 up 1.5%, per TradingView.

These macro tailwinds likely explain the strength in crypto prices on Thursday.

But can the momentum continue?

Can Positive Momentum in Crypto Prices Continue?

Thursday’s rise in crypto prices still leaves most major coins substantially lower for the week.

Bitcoin fell from above $64,000 on Monday, after all.

Traders are thus asking if crypto prices can erase their weekly losses.

Some of that will depend on Friday’s US Core PCE inflation data. The data is expected to support expectations that the Fed starts cutting interest rates next month.

While the likelihood that the Fed will kick off rate cuts with a 50bps reduction has slipped recently, the start of a series of interest rate cuts should be bullish for the market.

That’s assuming the US economy remains on track to avoid recession.

Next week’s US jobs and ISM PMI data will be very informative on the US economic growth front.

While crypto prices might not be able to erase losses this week, September could be a good month.

US politics, of course, remains a major wild card. Crypto markets have responded positively recently to developments that raise Donald Trump’s chances of winning the November election.

He has come out as the more staunchly pro-crypto candidate.

Polymarket betters currently price a 50% chance he wins, versus a 48% chance that Democrat nominee and sitting VP Kamala Harris wins.

September could see all sorts of twists and turns in the race, with a debate between the two candidates coming up.