4 US Economic Events to Drive Bitcoin Sentiment This Week

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This week, the cryptocurrency market should prepare for potential market fluctuations, as several key U.S. economic data releases could sway investor decisions regarding their portfolios.

The economic data is released with Bitcoin‘s price still under $100,000. Analysts expect potential drops continue, yet there’s a hint of optimism linked to Donald Trump’s upcoming inauguration in a week.

PPI

On Tuesday, we’ll see the release of the U.S. Producer Price Index (PPI) data, a report compiled by the U.S. Bureau of Labor Statistics (BLS). This data carries implications for cryptocurrencies because it offers insights into inflation among producers. Furthermore, it gives early warnings about future consumer prices, which can impact investor attitudes.

As a crypto investor, I’m keeping a close eye on this week’s upcoming US Producer Price Index (PPI) report. This data will reveal December’s producer-level inflation, with analysts predicting a 0.3% increase, which is actually a slight decrease from the 0.4% rise we saw in November. Interestingly, the PPI for November surpassed both the forecast and the general expectations, making it the fifth consecutive month of increasing PPI figures. The higher-than-anticipated producer prices in November suggest that inflationary pressures continue to persist.

The fight against inflation by the Fed through increased interest rates appears to be ongoing. As a result, various financial markets, including cryptocurrencies, will closely monitor upcoming US economic data due on Tuesday. Any substantial difference from forecasts may impact rate-reduction predictions and overall market sentiments.

CPI

This week’s economic spotlight includes both the Producer Price Index (PPI) and the Consumer Price Index (CPI) in the United States. The minutes from last week’s Federal Open Market Committee (FOMC) meeting showed that policymakers are worried about the possible inflationary effects of President-elect Donald Trump’s proposed policies, without any hint suggesting an imminent interest rate cut by the Fed.

Based on the latest reports from Reuters, as an analyst, I anticipate a slight uptick in the year-over-year (YoY) headline Consumer Price Index (CPI) inflation, moving from November’s 2.7% to approximately 2.8%. The forecasted range for this figure is between 2.6% and 2.9%. Regarding core inflation, which disregards food and energy costs, I predict an increase to around 3.3%.

In anticipation of the CPI release due on Wednesday, if inflation figures surpass expectations, it may fuel questions about the Federal Reserve’s capacity to reduce interest rates. This uncertainty is intensified by the inflationary implications of President Trump’s policy proposals. Such trends could fortify the US dollar, potentially leading to a bearish impact on Bitcoin.

One participant in the crypto market expressed their belief that we might revert to a price level of $100,000. However, they cautioned that this could change if the Producer Price Index (PPI) and Consumer Price Index (CPI) data does not favorably impact the market.

Blackrock Earnings

This week’s key financial reports feature releases from BlackRock, Citigroup, Goldman Sachs Group, JPMorgan Chase, and Wells Fargo on Wednesday, with Bank of America and Morgan Stanley due to follow suit on Thursday.

The scrutiny on BlackRock’s forthcoming report is high, as it plays a significant part in fueling institutional investment in Bitcoin and Ethereum by offering these cryptocurrencies via its IBIT and ETHA Exchange-Traded Funds.

Excitedly anticipating the news about an expected rise in dividends from BlackRock, as mentioned by a well-liked user on X.

An enhancement in the dividend payout from BlackRock might imply that the company views its Bitcoin-linked offerings as both financially viable and enduring. This action could enhance the industry’s reputation, potentially drawing in a larger number of institutional investors.

Traditional investors usually look for indications of durability and profit potential before diving into fresh investment territories. If BlackRock sends a favorable message about Bitcoin and Ethereum, it might persuade more traditional investors to invest, which could boost prices and increase overall market acceptance.

Initial Jobless Claims

On Thursdays, the weekly jobless claims report serves as the finale for a sequence of significant U.S. economic occurrences that may influence the crypto market. This report, titled Initial Jobless Claims, records the number of new unemployment benefit applications submitted during the previous week, offering an insight into the current state of the job market.

The latest figures indicate that US job growth unexpectedly increased in December, causing the unemployment rate to decrease and weekly initial jobless claims to reach an all-time low of 201,000. Moreover, the Bureau of Labor Statistics’ November JOLTS report presented a positive surprise, revealing approximately 8.1 million open jobs, suggesting a strong finish for the labor market in 2024.

Investors in the cryptocurrency market will be keenly observing Thursday’s jobless claims data for indications of weakening labor market conditions. The predicted figure is around 210,000. If the actual number is lower than expected, it could imply that the job market remains robust, possibly indicating consistent consumer spending and a strong economy.

On the other hand, this power may lead the Federal Reserve to think about increasing interest rates, a move that would strengthen the US Dollar but potentially suppress Bitcoin.

As a crypto investor, I’ve observed that the employment sector significantly impacts consumer behavior, which in turn shapes the majority of our nation’s economy. When jobs are plentiful, it bolsters confidence and fosters economic expansion. Conversely, increasing unemployment could be an ominous sign of potential economic turmoil lurking on the horizon.

Currently, the value of Bitcoin stands at approximately $94,045. Compared to when the market opened on Monday, this represents a slight decrease of 0.5%. This information is derived from data provided by BeInCrypto.

It’s noteworthy that this week’s U.S. economic data is released before a significant event in the crypto world happening in the U.S., specifically on January 20th (a market holiday), when President-elect Donald Trump will be inaugurated. During his inaugural speech, there’s a possibility that Trump may announce plans for a U.S. Bitcoin Strategic Reserve.

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2025-01-13 13:11