Bitcoin briefly topped $65,000 on Thursday after US second-quarter GDP growth missed forecasts, but strong consumer spending and persistent inflation undercut the case for near-term Fed rate cuts. Thin trading volume and a concentration of holder cost bases near $69,000 leave the move exposed to selling pressure.
Bitcoin briefly topped $65,000 on Thursday after US economic growth fell short of forecasts. The largest cryptocurrency was trading near $64,729 as of press time, having reached an intraday high of $65,071 and recovered from a low of $63,205.
The advance followed data showing the US economy expanded at a 1.5% annualized rate in the second quarter, below both the first quarter's 2.1% pace and analysts' forecast of 2.1% growth. The miss initially favored Bitcoin, since weaker growth can pressure the Fed to ease policy. Yet strong consumer spending and persistent inflation offered little evidence that lower rates were approaching.
Strong domestic demand limits the dovish signal
Household spending accelerated at a 3.2% annualized rate during the quarter, up from 0.5% in the first three months of the year. Joseph Brusuelas, principal and chief economist at RSM US, said the widening trade deficit subtracted about one percentage point from headline growth, making the 1.5% reading a misleading measure of the economy's momentum. According to RSM US, Brusuelas said: "Once one looks beneath the topline, growth looks much firmer and inflationary."
The gross domestic purchases price index rose at a 5.7% annualized rate during the quarter. Core personal consumption expenditures prices increased 3.4%, above the Fed's 2% target. Three officials had already voted for a rate hike at Wednesday's meeting, though the Fed held its benchmark rate at 3.50% to 3.75%.
Treasuries out-yield Bitcoin's institutional carry trade
Resilient demand and persistent inflation reduce the odds of easier liquidity soon, leaving Bitcoin's move above $65,000 short of a policy-driven breakout. The three-month Bitcoin futures basis, which tracks the return from the cash-and-carry trade institutional desks use, has remained below the two-year Treasury yield since February, Glassnode said — only the second such stretch on record in which government debt has outyielded the Bitcoin trade.
Spot trading volume in Bitcoin has fallen to its lowest level since 2019, while exchange deposits and withdrawals sit near their quietest in three years. US spot Bitcoin ETFs have also returned to modest net outflows after briefly attracting fresh capital in mid-July.
Bitcoin's next test sits near $69,000
Coins have traded most heavily between approximately $62,000 and $68,000, Glassnode data show. Long-term holders control about half of that supply, while shorter-term investors hold the rest and may sell as prices approach their entry points — which helps explain why repeated attempts to push Bitcoin below $62,000 to $63,000 failed before the Fed meeting.
Glassnode places the aggregate short-term holder cost basis near $69,000, marking that level as the next test of fresh demand. A sustained move through $68,000 to $69,000, alongside stronger volumes and renewed ETF inflows, would suggest buyers are absorbing the supply built up across the range.
Source: CryptoSlate
Trading involves risk.
Risk Disclaimer
