Weak US economic data may prompt the Fed to shift to a dovish stance, potentially benefiting Bitcoin

On May 1st, according to TheBlock, following the release of US macroeconomic data on Wednesday, Bitcoin once dropped below the $94,000 level, with an intraday decline of 1%. Major altcoins such as Ethereum and Solana also fell in unison, and the total cryptocurrency market capitalization contracted by nearly 4%. The US economy contracted by 0.3% in the first quarter, which was lower than the expected growth of 0.2%. The year-on-year core PCE in March increased by 2.6%, in line with expectations but lower than the revised value of 3.0% in February. In April, ADP nonfarm payrolls added 62,000 jobs, a significant decrease from the 147,000 in March. 21Shares crypto investment expert David Hernandez pointed out: "Federal Funds futures indicate that the market currently expects the Fed to cut interest rates more than 4 times this year. Against the backdrop of simultaneous signals of decelerating inflation and economic recession, policymakers' balancing act will be crucial to the market trend in the coming weeks." CoinPanel's senior automation expert, Kirill Kretov, believes that interest rate cuts will benefit Bitcoin through a threefold mechanism: a weakening US dollar, improved liquidity, and a decline in bond yields. "The -0.3% GDP data combined with President Trump's increased pressure on the Fed significantly raises the probability of a policy shift towards dovishness. In the current context of thin Bitcoin liquidity, even mild inflows of funds could potentially lead to a significant increase in prices." The market generally believes that weak economic data may force the Fed to start an easing cycle earlier than expected.