Each new week brings its share of events likely to shake up the crypto market. As this weekly cycle begins, some crucial economic data is already shaking up investors. This week, US retail sales figures and the Fed's impending interest rate decision are capturing the attention of traders. These elements could play a key role in the volatility of Bitcoin and crypto in general.
Economic factors could shake up the crypto market this week
Crypto market traders and investors are holding their breath this week as several major US economic indicators are expected. Besides these 3 key indicators, this new data will probably influence the trajectory of Bitcoin (BTC), which is currently oscillating between $57,000 and $60,000.
Between retail sales figures, the Fed's interest rate decision, and unemployment claims, the crypto market is far from finished trembling.
Retail sales in the USA: a key indicator for crypto
Retail sales data in the United States, expected this Tuesday, will be crucial for assessing the health of the American economy. In July, an unexpected 1% increase took everyone by surprise, contrasting with the 0.2% decline in June. A new sustained rise would signal a solid recovery in consumption, which could push risky assets like cryptos higher.
A weak figure, on the other hand, would rekindle recession fearscooling investors' enthusiasm for Bitcoin and others. Here's what traders are closely watching:
- The performance of American consumption;
- Impact on risky assets like BTC;
- Global economic forecasts.
The Fed's decision: a key moment for Bitcoin
On Wednesday, the spotlight will turn to the Fed's highly anticipated interest rate decision. With inflation having slightly eased, expectations are for a cut, but of what magnitude? Suspense is at its peak: a 50 basis point reduction – which would be an imminent danger for bitcoin – could surprise markets and trigger increased volatility, while a more moderate 25-point cut would be seen as more “predictable”.
For Bitcoin (BTC), which saw an increase of nearly 7% last weekthis decision could make all the difference.
The market, always sensitive to Fed announcements, is preparing to react. Some observers like JPMorgan advocate a rapid cut, but others remain cautious.
As Mati Greenspan, CEO of Quantum Economics, stated, “ a 0.25% cut would be seen as a favorable signal for risky assets such as crypto” .
The American job market: a risk barometer
The last key indicator to watch: unemployment claims in the United States. Although the job market is showing signs of slowing down, unemployment rates remain relatively low, holding at 4.2% in August. A significant deterioration could lead to a change in sentiment among investors, weighing on market morality.
However, a still robust job market could favor a “soft landing” scenariowhere the economy lands smoothly without too much turbulence. Bitcoin and other crypto assets would then benefit from a more favorable environment, with no immediate risk of recession.
Volatility and Bitcoin, two inseparable concepts. To navigate this turbulent sea, it is crucial to closely watch economic factors and market reactions.
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