Bitcoin ( BTC ) continued its quiet July as the report on Thursday morning of stronger-than-expected Q2 GDP growth, and softer inflation than expected did not move crypto prices either way. Bitcoin was slightly lower at $29150 as of print time over the last 24 hours, underperforming the CoinDesk Market Index, which rose by 0.2%. Bitcoin is on track to have its second loss month in 2023 as July comes to an end.
The government announced today that the U.S. economic growth in the second quarter 2023 was 2.4%, a significant increase from the previous quarter’s 2%. This figure is a preliminary estimate and will be revised more than once over the coming months. The preliminary estimate of 2.4% is likely to be revised several times in the coming months.
In the Q2 GDP report, the PCE price index showed that prices rose by 2.6% compared to expectations of 3.0%. This was down from 4.1% during Q1. The number of initial jobless claims was lower than expected. 221,000 Americans filed for unemployment, compared to forecasts of 235,000.
The short version is that the economy continues to grow, inflation is rising but at a slower pace and the labor market is still robust. With the exception of those numbers, not much has changed since the last few months.
What does this mean for cryptocurrency assets?
Digital assets, and Bitcoin in particular, appear to be stuck in a very tight trading range. has discussed this on Monday. Bitcoin’s response to macroeconomic data is mild. This doesn’t negate the importance of investors monitoring economic trends. However, it does indicate that a major surprise will be needed to significantly move prices.
Bitcoin’s price has only advanced.002% since it breached the lower Bollinger Band range on July 25. Its 20-period moving average price of $30,000 remains a possible price target.
The trajectory of wallet balances also shows signs of stagnation. According to Glassnode, the total supply of bitcoins held by addresses in multiple’size buckets” has been flat.
In July, addresses holding a balance of between 10 and 100 BTC saw a 0.001% increase in supply. Supply fell by 0.004% for addresses with balances between 100-1000 BTC. For smaller investors, with balances between 0.1 BTC and 1 BTC the supply increased by 0.005%.
There is a silver lining for bullish investors in this situation. While prices appear stuck in a rut there does not seem to be any catalysts that are bearish on the horizon.
Investors may be looking at the performance discrepancy between bitcoin and Ethereum. BTC and ETH are still closely correlated but BTC is outperforming ETH in 2023 by 21%. This could be due to expectations that a bitcoin ETF will soon be available in the U.S.
Ether currently also appears to be lacking a bearish catalyser. In the meantime, its total supply continues to fall. It has fallen by 4,800 tokens in the last seven days.