Bitcoin Bounces Back Above $43,000 After Strong US Retail Sales Data Prompts Brief Price Dip – Here’s Why BTC Could Soon Hit Fresh Yearly Highs

cryptonews.com:

Stronger-than-expected US November Retail Sales data released earlier on Thursday triggered a sudden near-$1,500 drop in the Bitcoin (BTC) price from just under $43,000 to around $41,500.

Seemingly, the data, which showed an unexpected MoM leap in headline and core retail sales last month, triggered some algorithmic selling, perhaps a reflection of fears that the strong data might result in the market’s paring back on recent bets that the Fed will start cutting interest rates next year.

But the BTC price has since recovered rapidly back to the north of the $43,000 level, with the broader market not having interpreted the latest US data in this way whatsoever.

On the contrary, US stock prices continue to pump on Thursday while US government bond yields and the US Dollar Index (DXY) continue to plunge, as investors continue to price in anticipation that a Fed rate cutting cycle is set to start within a few months of the start of 2024.

The Fed announced monetary policy on Wednesday, keeping interest rates unchanged at 5.25-5.5% as expected.

But the US central bank’s updated economic and interest rate projections forecast continued easing in inflation next year and three interest rate cuts, hence the recent moves being seen across the macro landscape.

The S&P 500 just hit highs for the year in the 4,700s and is only a whisker off of early 2022’s record highs, the 10-year US government bond yield is down nearly 30 bps in two days and just hit its lowest levels since July under 4.0% and the DXY just tumbled to multi-month lows under 102.

Moves in traditional asset classes reflect a market that is betting on easier monetary policy from the Fed, which means lower interest rates and more liquidity, a combination that has historically