Bitaigen Research We have compiled this week’s Federal Reserve interest‑rate policy and U.S. economic data and their latest impact on the crypto market, analyzed why Bitcoin and Ethereum experienced sharp volatility, and looked ahead to possible future trends. The article also evaluates how Q1 U.S. GDP and inflation figures have affected market sentiment, helping readers identify potential investment opportunities.
Bitcoin briefly dropped to $62,700, and Ethereum slipped below $3,100, mainly due to the U.S. first‑quarter GDP growing only 1.6 % while inflation remained elevated, weakening overall market sentiment.
U.S. Economic Growth Slows Sharply
The Federal Reserve has kept the federal funds rate steady in the 5.25 %–5.50 % range for five consecutive FOMC meetings since July last year. Nevertheless, the latest data show a clear deceleration in U.S. economic momentum. The U.S. Department of Commerce released figures on the evening of the 25th indicating that the gross domestic product (GDP) annualized growth rate for Q1 2024 was 1.6 %, far below the prior forecast of 2.4 % and a steep drop from the 3.4 % recorded in Q4 2023—the lowest pace since Q3 2022.
At the same time, price pressures have not eased with the slowdown. The Personal Consumption Expenditures (PCE) index rose 3.4 % in the first quarter, still above the Federal Reserve’s 2 % target.
Fed Rate‑Cut Expectations Dashed
The upcoming FOMC meeting next week will review the data above. The CME FedWatch Tool shows that market participants now assign a >90 % probability that the Fed will keep rates unchanged in both May and June. Even by July, the chance of a cut is only 29.4 %, with a more likely first easing signal not expected until September. Fitch economists note that if economic growth continues to falter and inflation remains stubborn, expectations for a 2024 rate reduction become increasingly dim.
- Market outlook: The probability of leaving rates unchanged in June stands at 90.3 %.
All Three Major U.S. Stock Indices Fall Simultaneously
Against a backdrop of high rates, high inflation, and a weakening economy, investors grew nervous that the Fed may maintain a tight policy stance, prompting U.S. equities to open lower across the board on Thursday:
| Index | Daily change | Closing level |
|---|---|---|
| Dow Jones Industrial Average | –375.12 points (‑0.98 %) | 38,085.8 points |
| Nasdaq Composite | –100.99 points (‑0.64 %) | 15,611.76 points |
| S&P 500 | –23.21 points (‑0.46 %) | 5,048.42 points |
| Philadelphia Semiconductor Index | +88.84 points (+1.96 %) | 4,615.04 points |
Crypto Market Performance
The double blow of U.S. GDP missing expectations and inflation staying high pushed Bitcoin into a sharp intraday dip around 9 p.m. last night, reaching a low of $62,747 before rebounding quickly. At the time of writing, it sits at $64,466, up 3.4 % over the preceding 24 hours.
Ethereum mirrored Bitcoin’s pattern, briefly breaking the $3,100 threshold before climbing back to $3,148, a modest 0.17 % gain in the same 24‑hour window.
The above provides a complete analysis of the “Bitcoin spike to $62,700, Ethereum falls below $3,100” episode and the impact of U.S. Q1 GDP falling short of forecasts while inflation rises. For more coverage of the slowing U.S. economic growth, please follow other articles on Bitaigen (比特根).
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Related Reading
- Bitcoin Volatility: ETF Structure, IBIT Settlement & Trading
- Bitcoin 2026 Outlook: Macro Risks, Liquidity Tightening & Price Below $100K
- Key Factors Influencing Bitcoin Price: Supply, Macro Trends & Tech
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⚠️ Risk Disclaimer: Crypto prices are highly volatile. This is not investment advice.
