Big week ahead for Bitcoin, Crypto: This will be important
The Bitcoin and crypto market is once again facing an important week. After Bitcoin hit its annual high of $24,248 on February 2nd, the price is currently in a consolidation.
In particular, the news surrounding Kraken, the US Securities and Exchange Commission and the alleged ban on crypto staking from centralized US exchanges caused a decline in the crypto market last week. But divergent statements from different members of the US central bank Fed are also dragging down prices in the crypto market.
On Friday, the US Bureau of Labor Statistics also adjusted the inflation rates published in recent months retroactively, raising fears of “sticky” inflation and raising the prospect of interest rates over a longer period.
Macro data for bitcoin and crypto this week
This trading week, the most important event comes on Tuesday. At 8:30 a.m. EST, the US Bureau of Labor Statistics will release US inflation data for the final month of January. In December, the CPI was 6.5%, down from 7.1% in November.
For January, experts now expect a decline to 6.2%. If analysts’ expectations are confirmed or even better, the rise in the stock market as well as in the crypto market, which has been going on since the beginning of the year, may continue. The SEC news and Operation Choke Point rumors can be pushed to the background.
However, if the CPI comes in above estimates, the US Dollar Index (DXY) is likely to continue to strengthen, pulling down risk assets such as crypto and Bitcoin through its inverse correlation. And the risk of this cannot be underestimated.
Last Friday 10 February, the figures for the last three months were subsequently adjusted upwards due to seasonal adjustments. This may be a warning sign that the US inflation rate may be more “sticky” than previously thought and priced in by investors.
The dollar index (DXY) is currently at an interesting point. After the DXY was able to hold its multi-year support at 101, the index is currently at 103.7, just below resistance at 103.9.
A daily close above this level could spell further doom for the crypto market. With the daily RSI still at just 56, the DXY may have further room to move higher. A look at DXY is therefore still of great importance this week.
Other dates this week
On Wednesday, February 15th, US retail sales for the month of January will be unveiled at 8:30am EST. They are considered an important measure for calculating households’ spending mood.
In November and December 2022, US retail sales were in negative territory. In the Christmas month of December, the figure of -1.1% was even significantly below analysts’ estimate of -0.8%. For the month of January, however, the experts expect a rise to 1.6%.
If buying sentiment among US citizens actually improves, this could mean another bullish impulse for the stock market as well as the Bitcoin market after the CPI release the day before.
On Thursday 16 February, the US producer price index (PPI) for January will be released at 8:30 AM EST. Market experts expect a 0.4% month-on-month increase. As recently as December, producer prices had fallen by -0.5%, a more significant decline than analysts had suspected.
If the PPI rises as expected by the experts, the US dollar is likely to gain further strength and provide headwinds for the equity and crypto markets.
If, on the other hand, the PPI is below the market experts’ estimates, this will reduce the pressure on Bitcoin and could lead to a bullish price reaction in the crypto market.
At press time, the Bitcoin price stood at $21,752, finding support at the 200 EMA on the 4-hour chart.
Featured image from iStock, chart from TradingView.com
