Summary

• Cryptocurrency market not affected by economic data
• Analysts cautious about short-term crypto prospects
• Investors focusing on Fed's rate decision.

Bitcoin showed little reaction to the latest U.S. gross domestic product (GDP) data, which showed an unexpectedly small increase and suggested that the economy may be cooling. Additionally, jobless claims were mixed and suggested that the job market may not be as robust as previously thought. Despite this, the largest cryptocurrency by market capitalization was recently trading just below its most recent $23,000 support line, down 1.4% over the past 24 hours. However, Bitcoin's more than 35% rise this year remains a positive trend, even though analysts remain cautious about its short-term prospects, along with those of other cryptocurrencies, due to industry issues that have arisen in 2022.

"An uptick in volume in conjunction with higher prices is generally a bullish sign," CoinDesk Crypto Markets Analyst Glenn Williams wrote in his weekday column. "Flat prices, however, signal that bullish and bearish investors are both actively expressing their market views."

Other major cryptocurrencies followed a similar trend, with slight declines in value. For example, Ether was trading just below its current $1,600 support, while other major cryptos experienced deeper drops. Layer 1 network Aptos Network's APT token recently plunged nearly 5% and lost some of the ground it gained earlier this week. APT was changing hands comfortably over $17, far removed from its levels around $3.50 at the start of the year. Ethereum scaling tool Polygon's MATIC token was an exception to the overall trend, recently rising more than 7%. MATIC is up about 45% in 2023 amid a spike in daily transactions. The Polygon platform has the second-largest number of daily active users (DAU), according to data from Token Terminal.

The CoinDesk Market Index (CDI), an index measuring the performance of cryptocurrencies, recently decreased about 1%. In contrast, equity markets continued their upward climb this year, with the tech-heavy Nasdaq and the S&P 500, which has a significant technology component, jumping 1.8% and 1.1%, respectively. Despite this, fourth-quarter earnings have continued to tilt negative and a rising number of firms have announced layoffs in anticipation of an economic contraction. Companies such as Amazon, Microsoft, Salesforce, and more recently IBM have announced job cuts.

The 2.5% rise in GDP and an unexpected decline in jobless claims on Thursday had little impact on the current investment environment, which turned cautiously hopeful that inflation will continue to decrease without the economy falling into a deep recession. That combination would likely enable the U.S. central bank to reduce the size of its next interest rate hike next week.

In an interview on CoinDesk TV's "First Mover" program, Jason Pagoulatos, markets associate at research group Delphi Digital, said that he didn't think the latest GDP data would have a great effect on crypto markets. Pagoulatos said that instead, investors were eyeing the Fed's upcoming rate decision, although more for company comments than whether governors raised interest rates by 25 or 50 basis points. "The market knows that the rate hikes are going to continue but at a slower pace until they reach whatever their terminal rate is," he said. "The main question that people are trying to get clarity over is how long and then what that ultimately means for things that are still showing signs of strength like the labor market."