Crypto Bounces But Weak Us Macro Data, AI Uncertainty Threaten The...

Cryptocurrencies show strength despite investors’ concerns about the AI industry and weak US labor and consumer data. Would an acceleration of money printing boost Bitcoin?

Low BTC and ETH leverage appetite contrasts with strong stock markets, highlighting fragile sentiment despite improving liquidity expectations.

While economic uncertainty persists, anticipated monetary easing reduces downside risk for cryptocurrencies, favoring a potential bullish momentum.

Bitcoin (BTC) and Ether (ETH) gained momentum on Wednesday, rising to their highest levels in two weeks as investors await a more expansionist monetary policy. Weak economic indicators boosted expectations of fresh stimulus measures, increasing demand for scarce assets.

The S&P 500 index and gold also reacted positively as investors anticipated higher liquidity entering the markets. Still, with the cryptocurrency market capitalization sitting 29% below its all-time high of $4 trillion, Bitcoin and Ether traders remain alert to the possibility of a correction driven by broader economic uncertainty.

Demand for scarce assets strengthened on Wednesday, shown by the jump in US 5-year Treasurys prices and gold approaching $4,240, up 3% in two weeks. Bitcoin held near $93,000, unchanged from two weeks earlier. Ether, however, remains 37% below its all-time high of $4,956, prompting traders to reassess the outlook for the altcoin market.

The US labor market showed signs of slowing in November as private companies cut 32,000 jobs, with small businesses facing the toughest conditions. The ADP payroll report noted that workers saw a 0.1% pay decline from October, which reduced inflation concerns. Traders now await the Fed’s interest rate decision on Dec. 10, expecting clearer guidance on policy direction.

Fed policymakers have signaled diverging views, partly due to the lack of official US government data during the government funding shutdown that ended on Nov. 12. Some argue rate cuts are needed to prevent deeper labor market weakness, while others warn additional reductions could aggravate inflation, which remains well above the Fed’s 2% target.

Growing dependence on artificial intelligence investments by some of the world’s largest companies adds another layer of uncertainty. Jean Boivin, head of the BlackRock Investment Institute, reportedly said: “There is so much talk about the potential of the bubble… people are conscious of the risk.” According to Yahoo Finance, BlackRock also highlighted the p

Source: CoinTelegraph