The Bitcoin and crypto market is once again facing an important week. After Bitcoin reached its annual high of $24,248 on February 02, the price is currently in a consolidation.
Especially the news around Kraken, the US Securities and Exchange Commission and the alleged ban on crypto-staking by centralized US exchanges caused a pullback in the crypto market last week. But diverging statements from different members of the U.S. Federal Reserve Fed are also dragging down prices in the crypto market.
On Friday, the U.S. Bureau of Labor Statistics also retroactively adjusted the inflation rates published in recent months, which rekindled fears of “sticky” inflation and increased the chance of interest rates for a longer period of time.
Macro Data For Bitcoin And Crypto This Week
This trading week, the most important event is coming up on Tuesday. At 8:30 a.m. EST, the U.S. Bureau of Labor Statistics will release the U.S. inflation data for the past month of January. In December, CPI was 6.5%, down from 7.1% in November.
For January, experts now expect a decline to 6.2%. If the analysts’ expectations are confirmed or even turn out better, the rally in the stock market as well as in the crypto market, which has been ongoing since the beginning of the year, could continue. The SEC news and Operation Choke Point rumors could be pushed to the background.
However, if the CPI comes in above estimates, the U.S. Dollar Index (DXY) is likely to continue to gain strength, dragging down risk assets like crypto and Bitcoin through its inverse correlation. And the risk of this cannot be underestimated.
Last Friday, February 10, the numbers for the last three months were subsequently revised upward due to seasonal adjustments. This could be a warning sign that the US inflation rate might 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 could have further room to move higher. A look at the DXY therefore remains of high importance this week.
Other Dates This Week
On Wednesday, February 15, U.S. retail sales for the month of January will be unveiled at 8:30 a.m. EST. They are considered an important measure for calculating household spending sentiment.
In November and December 2022, U.S. retail sales were in negative territory. In the Christmas month of December, the figure of -1.1% was even significantly below the analysts’ estimate of -0.8%. For the month of January, however, the experts expect a recovery to 1.6%.
If the buying mood among U.S. 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, February 16, the U.S. Producer Price Index (PPI) for January will be released at 8:30 a.m. EST. Market experts expect a 0.4% month-over-month increase. As recently as December, producer prices had declined by -0.5%, a more significant decline than analysts had suspected.
If the PPI increases as expected by the experts, the U.S. dollar is likely to gain further strength and provide headwinds for the stock and crypto markets.
If, on the other hand, the PPI is below the market experts’ estimates, this would reduce the pressure on Bitcoin and could lead to a bullish price reaction on the crypto market.
At press time, the Bitcoin price stood at $21,752, finding support at the 200 EMA in the 4-hour chart.
Bitcoin price, 4-hour chart | Source: BTCUSD on TradingView.com
Featured image from iStock, Chart from TradingView.com
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Author: Jake Simmons