The US Federal Reserve is making some analysts bullish on Bitcoin again
Signs of a steady Bitcoin (BTC) price recovery emerged earlier this week as investors shifted away from the U.S. dollar on weaker-than-expected economic data.
In detail, Bitcoin's drop last week to below $33,000 met with a healthy buying sentiment that pushed its per token rate to as high as $39,300 on Feb. 1. As of Thursday, BTC's price dipped below $37,000 but was still up 13% from its local bottom.
Meanwhile, the U.S. dollar index (DXY), which measures the greenback's strength against a basket of top foreign currencies, rose to 97.441 last Friday, logging its best level since July 2020. However, the index corrected by nearly 1.50% to over 96.00 by Feb. 3.
Some market analysts saw the dollar's renewed weakness as a sign of waning rate hike fears.
For instance, Lyn Alden, the founder of Lyn Alden Investment Strategy, tweeted that the Fed "reached a fever height last week in terms of making more and more aggressive tightening scenarios," noting that the central bank may turn dovish as "economic deceleration/weak PMI data takes center stage."
Alden cited the U.S. manufacturing growth, which, according to data released on Tuesday, dropped for the third month in a row in Jan. 2022. Notably, the Institute for Supply Management’s gauge of factory activity reached 57.60, its worst level since Nov. 2020, compared to 58.80 a month earlier.
Additionally, the ADP Research Institute data released Wednesday also showed cracks in the ongoing U.S. economic recovery, revealing that employment across the regional companies fell by 301,000 in December 2021, the highest since the early days of the Covid-19 pandemic.
The lower-than-anticipated data came a week after the Federal Reserve Chairman Jerome Powell's press conference. He raised
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