Bitcoin Stalls Near $65k as Strong US Spending Dampens Fed Rate Cut Hopes

Woofun AI reports that Bitcoin’s muted reaction to recent U.S. Gross Domestic Product (GDP) data highlights a disconnect between headline economic figures and market sentiment, as mixed signals from the Federal Reserve continue to dominate price action.

The cryptocurrency traded near $64,729 at press time, having recovered from an intraday low of $63,205 after briefly touching a high of $65,071. This narrow range reflects the market’s hesitation to interpret the GDP miss as a definitive catalyst for a bullish breakout, given the conflicting data points surrounding the broader economic landscape.

Theoretically, weaker growth metrics should increase pressure on the Federal Reserve to ease monetary policy, thereby reducing the appeal of cash and government bonds while improving liquidity conditions for risk assets like Bitcoin.

However, the current data suggests that the path to lower interest rates remains obstructed by underlying economic resilience, complicating the narrative for risk-on positioning.

Consumer spending accelerated at a 3.2% annualized rate during the quarter, a significant jump from the 0.5% rise seen in the first three months of the year. This surge in household expenditure, coupled with robust business investment in equipment linked to artificial intelligence (AI) infrastructure, indicates that the slowdown is concentrated in trade rather than domestic demand, undermining the case for immediate policy easing.

Brusuelas attributed much of the increase in imports to equipment needed to sustain AI investment, arguing that the trade figures reflect economic expansion rather than an approaching contraction. He noted: "Once one looks beneath the topline, growth looks much firmer and inflationary," suggesting that the underlying economic engine remains stronger than the headline GDP miss implies.

Inflation metrics further reinforced the argument against immediate rate cuts, with the gross domestic purchases price index rising at a 5.7% annualized rate during the quarter. Core personal consumption expenditures prices increased by 3.4%, remaining well above the Fed’s 2% target, which gives policymakers less reason to respond to the headline slowdown with easier monetary policy.

Woofun AI data shows that spot trading volume measured in Bitcoin has fallen to its lowest level since 2019, while combined exchange deposits and withdrawals are near their quietest levels in three years. This lack of participation reduces the incentive for institutional desks to supply the leverage, liquidity, and market depth required to support stronger rallies, as investors can earn competitive yields from Treasuries without accepting Bitcoin’s volatility.

Glassnode data reveals that the largest concentration of investor cost bases lies between $62,000 and $68,000, creating support beneath the market and potential selling pressure overhead. With the aggregate short-term holder cost basis near $69,000, Bitcoin remains confined to consolidation until it can clear this zone with renewed ETF inflows and stronger spot volumes, marking a critical test of whether fresh demand is entering the market.