Bullish for Bitcoin and the whole industry: GDP rises 2.9% in fourth quarter

  • The positive GDP number for the US economy in Q4 2022 hints at investor optimism and could support the Bitcoin rally going ahead.
  • The BTC price has given a breakout over all-three costs basis for the first since 2019.

Economists across the world have been putting closer attention to all the developments taking place in the United States. Earlier this week, the world’s largest economy unveiled its GDP data for the fourth quarter of 2022, exceeding projections.

The U.S. GDP during Q4 2022 stood at 2.9 percent exceeding the market expectation of 2.6 percent. The current data shows that the US economy continues to grow, however, at a slower pace than the third quarter wherein the GDP grew by 3.2 percent. But still, the market is seeing the Q4 GDP numbers with a sense of optimism despite several reports that retail sales were sinking during the end of last year.

As the GDP numbers came to be better than expected, it might lead to a better performance on Wall Street, and ultimately in the crypto space. Thus, it could turn out to be bullish for Bitcoin and the broader crypto market going ahead.

Since the beginning of the month, the Bitcoin bulls have been showing quite a bit of activity as the BTC price is already up by 33 percent in January. Earlier this month, the BTC price also surged past $23,000, however, it seems to be a resistance zone for now.

Bitcoin On-Chain Indicators

Amid the recent rally in the Bitcoin (BTC) price, the Bitcoin Fear and Greed Index has jumped to 55/100. This is for the first time since March 2022 that the Index has entered the Greed zone thereby easing a bit the contagion risk from the fall of FTX and Genesis. However, it is still quite on the lower end of the Greed zone and doesn’t necessarily mean that the Bitcoin party ends here.

As of press time, Bitcoin is trading at $22,883 with a market cap of $441 billion. This is for the first time in three years that Bitcoin has given a breakout on all three realized prices. On-chain data provider Glassnode explained:

The recent surge in #Bitcoin price action has resulted in an initial breakout above all three cost-basis for the first time since the 2018/19 bear market and the March 2020 Covid crisis. A sustained duration above these key psychological levels would be considered constructive.

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Courtesy: Glassnode

Furthermore, the recent Bitcoin price rally has also helped short-term investors or those who have been averaging at the bottom. Data from IntoTheBlock shows that 61% of the Bitcoin holders are currently in profit while only 36 percent are in loss.

If the BTC price sustains above $23,000, it could set the course further to $25,000 and even higher.

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