Bitcoin Remains Under Pressure Below $30K Following U.S. Retail Sales Numbers

Thursday's rally to a new 13-month high of $31,800 has now more than been fully nullified.

AccessTimeIconJul 18, 2023 at 1:35 p.m. UTC
Updated Jul 18, 2023 at 8:33 p.m. UTC

Bitcoin's (BTC) price at $29,735 was barely holding above a one-month low after Tuesday morning's economic data confirmed the U.S. economy remains in growth mode and traders brace for what's now a near 100% certainty of another Federal Reserve rate hike next week.

Bitcoin, which appeared set for a major upside price breakout when it rallied as high as $31,800 last week, was recently down 0.7% over the past 24 hours and sits just below its $30,000 support of much of the past month.

Other major cryptos were mixed. Ether, the second largest token by market value was recently trading at $1,893, flat from Monday, same time. XRP, which soared and then sank last week following a favorable court ruling in Ripple's ongoing court case with the SEC, was changing hands at 76 cents, up more than 4%. But ADA, SOL and MATIC, the native cryptos of smart contract platforms Cardano and Solana, were recently off 2%, 3.6% and 5%, respectively.

On its face, the retail sales report from the U.S. Census Bureau for June showed some weakness, with the headline number rising 0.2% last month versus forecasts for 0.5% and May's 0.5%. However, the retail sales "control group" – which filters out some components to compile a more precise gauge of consumer spending – rose 0.6% in June, more than double May's pace and far ahead of estimates for a decline of 0.3%.

"Score another win for team soft landing," said Joseph Brusuelas, chief economist at RSM. He noted that the control group is higher by 2.1% on a 3-month average annualized basis, implying modest upside risk to his team's forecast for 1.7% GDP growth in Q2.

What little doubt about the result of next week's meeting of the Fed's policy-setting Federal Open Market Committee (FOMC) has been essentially fully erased, with traders now pricing in a 97.3% chance of another 25 basis point rate hike, according to the CME FedWatch Tool.

Equity markets rose amid encouraging second quarter earnings from Bank of America and other major financial services organizations that continued a trend from last week when JP Morgan Chase reported sizable gains in net income and revenues. The tech-heavy Nasdaq Composite and S&P 500 both closed up 0.7%.

In an email to CoinDesk, Jake Boyle, director of retail crypto brokerage Caleb & Brown, called the dip below $30,000 "a natural consolidation.

"There was perhaps a little too much euphoria following Ripple’s apparent win against the SEC last week, with the court ruling sparking a wall of capital to flow back into the ecosystem," Boyle wrote.

But he also noted "a sentiment shift that will at least keep Bitcoin and a good many other digital assets grinding upwards."

"There will be more pullbacks," Boyle wrote. "But the trajectory is clear. We’re on the up and up.”

UPDATE (July 18, 2023, 20:32 UTC): Updates prices, adds equity index closing figures and Boyle quote.

Edited by James Rubin.


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Stephen  Alpher

Stephen Alpher is CoinDesk's managing editor for Markets. He holds BTC above CoinDesk’s disclosure threshold of $1,000.