4 Key Economic Events That Could Make or Break Bitcoin This Week!

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Cryptocurrency traders and investors are preparing for a turbulent week ahead, beginning on Monday, as several significant economic reports are due, which could potentially impact their investment holdings.

Currently, Bitcoin (BTC) hovers around the $100,000 level. Whether it maintains this significant level as a foundation will hinge upon how traders react to the upcoming economic data releases this week.

Donald Trump Inauguration

In the United States, Monday, January 20th is celebrated as Martin Luther King Jr. Day. However, this day holds significant importance for cryptocurrency market participants in the country due to the inauguration of Donald Trump. On his very first day in office, Trump promised to sign a series of executive orders that were beneficial to the industry.

As Trump approaches elections, he promised a less strict approach from regulators, especially with regards to cryptocurrencies – a key part of his campaign. This renewed interest in the pro-crypto candidate could spark speculation about possible favorable regulatory changes if he wins again. With this anticipation, there’s been increased enthusiasm among U.S investors towards Bitcoin.

Since the financial markets are closed due to holidays on Monday, the effects of this significant event won’t be felt until the following day. However, many investors remain vigilant, preparing themselves for potential impacts, whether positive or negative.

As a crypto investor, I believe this Trump inauguration presents an opportunity for a potential sell-off (sell-the-news) or it could be just a mid-level event with room for growth. Regardless, I am optimistic that we’ll continue moving upward in the long run.

Initial Jobless Claims

On Thursday, we’ll learn about the number of American workers who applied for unemployment benefits during the previous week. This data provides a current perspective on the condition of the job market.

Last week’s report showed that Initial Jobless Claims exceeded expectations, climbing up to 217,000 for the week ending January 10. This figure was greater than the initial forecast and higher than the previous week’s number of 203,000.

Should the rising unemployment claims persist, it’s likely to prolong periods of financial struggle and a shrinking job market. This situation might cause a decrease in consumer expenditure and consumer trust, potentially damaging various financial sectors such as Bitcoin and cryptocurrencies.

An uptick in jobless claims implies that a higher number of individuals are either jobless or struggling to find employment. Consequently, their disposable income decreases, which in turn may lead to less investment in financial assets such as Bitcoin.

BOJ Possible Rate Hike

This week, we’re closely watching for the Bank of Japan’s interest rate decision and their economic outlook report scheduled for January 24. If they increase rates, it might indicate a change in worldwide money flow patterns, potentially squeezing carry trades.

If interest rates are increased (which could happen), global financial markets will be affected, with cryptocurrencies being no exception, as mentioned by a user on platform X.

According to a Bloomberg poll, many economists anticipate that Japan might increase its interest rates, potentially leading to market instability. Yet, this action depends on whether the markets experience any disturbances due to Donald Trump’s presidency inauguration.

As a crypto investor, I’m keeping an eye on the situation in Japan as their central bank may reinforce their intention to increase interest rates should the economy continue its positive trajectory, according to reports from Reuters on Friday, based on insider information.

It was suggested by someone on platform X that Bitcoin may see a sudden decline of around 50% starting within the next seven days. This prediction lines up with the possibility of a repeat of the 1929 market crash pattern following the Bank of Japan’s rate decision on January 24.

A well-known user and investigator on X, Cypress Demanincor, concurs, implying that the Bank of Japan’s interest rate increase might exert a stronger influence on Bitcoin market fluctuations compared to the effects caused by Donald Trump’s inauguration.

While many are focusing on the Trump Inauguration as the next significant market event, it’s crucial to also consider the potential increase in BOJ interest rates, which could occur soon. If it doesn’t happen, then we shouldn’t anticipate any major concerns until March. However, when managing investment risk, it’s important to keep this possibility in mind and be prepared for its potential impact on a portfolio.

It’s widely believed that if the Bank of Japan (BOJ) chooses to raise interest rates, it may influence international investment strategies such as the yen carry trade. In this approach, investors take advantage of the low yen interest rates by borrowing yen to purchase higher-yielding assets. This could lead to a reduction in liquidity and impact risky investments worldwide, possibly overshadowing the so-called “Trump rally.

As a researcher examining Bitcoin’s market dynamics, I can attest that it is known for its sensitivity towards global economic fluctuations. In the event of a rate hike by the Bank of Japan (BoJ), there might be a surge in the selling of risk assets, such as Bitcoin (BTC). This reaction stems from the need for investors to adjust their positions in the yen carry trade. Such adjustments could lead to increased volatility in the price of Bitcoin, given its role as the pioneer cryptocurrency.

Consumer Sentiment

Additionally, the US Consumer Sentiment Survey due on Friday is significant because it combines how people feel about their personal finances and the overall economy. A positive outlook can boost economic confidence and possibly encourage investment in assets such as Bitcoin. Conversely, a negative sentiment might lead to reduced investor trust and a move towards secure assets, potentially affecting Bitcoin’s price.

As a data analyst, I can share that at this moment, I’m observing the price of Bitcoin to be approximately $102,461. Compared to when the market opened on Monday, there has been a decrease of 2.15%.

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2025-01-20 11:36