Bitcoin (BTC) wobbled in its narrow trading range at the Sept. 29 Wall Street open as official data put the United States economy in recession.
U.S. meets technical definition of recession
The pair weathered gloomy figures for the United States, with the second quarter gross domestic product (GDP) growth estimated at -0.6%. This, despite protests of the White House to the contrary, meant that the U.S. met the standard criteria for recession — two consecutive quarters of negative growth.
“Everyone talks about recessions as if they should never happen,” financial commentary resource The Kobeissi Letter reacted.
“Any economy that is healthy in the long run will have many recessions. If you never have a recession, you just have a bubble. In this case, we just have a bubble and a recession. Fake markets don’t work.”
Analyzing the situation in Europe, meanwhile, Robin Brooks, chief economist at the Institute of International Finance (IIF), warned that a “deep” recession was also about to hit the eurozone on the back to consumer confidence data.
“With the second quarterly GDP revision negative, […] the White House has stated that this is not the definition of a recession,” popular Twitter account Unusual Whales continued about the confusion over what constitutes a recession which began earlier this year.
“Rather, they advocate for NBER’s, which is ‘a significant decline in economic activity spread across the economy lasting more than a few months.'”
The event follows the Bank of England abruptly intervening in the United Kingdom bond market, returning to quantitative easing (QE) in a move reminiscent of the atmosphere at Bitcoin’s birth.
$19,000 looks unstable
Bitcoin price action nonetheless managed to avoid any significant volatility as the figures flowed in, even with the monthly close just a day away.
At the time of writing, BTC/USD was attempting to break through $19,000 support.
Noting that the -0.6% GDP result was better than the forecast -0.9%, on-chain analytics resource Material Indicators nonetheless had little reason to celebrate.
Alongside a screenshot of the BTC/USD order book on Binance, Material Indicators warned that the market bottom was “not in.”
“Strong economic report means FED tightening hasn’t had much if any impact yet. Translation: More aggressive rate hikes through Q4 and into 2023,” it predicted in part of accompanying comments.
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