Bitcoin (BTC) is gearing up for a crucial week ahead on the U.S. calendar, with several major macroeconomic events on the horizon. The influence of these data releases on the cryptocurrency market has regained significance after a period of decline in the latter half of 2023.
Cryptocurrency traders and investors should brace themselves for potential volatility as a series of impactful events are scheduled on the economic calendar this week.
Bitcoin braces for U.S. Economic Indicators: What to Watch Out For
This week’s lineup of major U.S. economic indicators is packed with events that could have an impact on Bitcoin and digital assets, with a highlight being interviews featuring Donald Trump and Elon Musk.
Interview with Trump and Musk
Donald Trump is set to interview Elon Musk via X Space on Monday, August 12, at 8 p.m. Eastern Time. The unscripted interview will cover various topics, with Musk inviting questions from the public. Reports suggest that Musk, a strong supporter of Trump, has established a super PAC focused on endorsing candidates who advocate for meritocracy and personal freedoms.
“We will be conducting extended testing of the system tonight and tomorrow before speaking with Donald Trump,” Musk said on Sunday.
The interview holds potential implications for Bitcoin and cryptocurrencies, following Trump’s positive comments at a conference in Nashville. Given their shared support for cryptocurrencies, the discussion may touch on the topic as well.
Core PPI (Wholesale Inflation)
On Tuesday, the U.S. Bureau of Labor Statistics (BLS) will release July’s core producer price index (PPI). This data tracks price increases at the producer level, providing insights into inflation at the wholesale level. A rise in core PPI could lead to increased production costs, impacting energy and hardware expenses related to mining and processing cryptocurrencies.
Expectations point to a 2.2% annual growth, slightly lower than June’s figure. Excluding volatile food and energy prices, core PPI is anticipated to rise 2.7% from the previous 3%.
US Consumer Price Index
The U.S. Bureau of Labor Statistics will also unveil the July Consumer Price Index (CPI) this week, which measures price changes for consumer goods and services. Projections suggest a 2.9% annual increase in CPI, with core CPI expected to rise by 3.2%. Any uptick in CPI could impact consumer purchasing power, potentially affecting the Bitcoin and cryptocurrency markets.
Read more: How to use cryptocurrencies to protect yourself from inflation
Rising inflation, as indicated by the CPI, may drive individuals towards cryptocurrencies as a hedge against depreciating fiat currencies, potentially increasing demand for Bitcoin and other digital assets.
Initial Jobless Claims
The Census Bureau is set to release U.S. employment claims on Thursday, revealing data on retail and food service sales for July. Economists are anticipating a month-on-month growth of 0.3%, consistent with June figures.
Excluding auto sales, retail sales are forecasted to grow by 0.1%, slightly lower than the previous reading. Despite recent recession concerns, markets remain hopeful for sustained growth in consumer spending.
“Bitcoin and Ethereum tend to underperform during times similar to or close to U.S. recessions. Additionally, investors are reducing their positions as prices fall below the average entry point for ETF investors (around $60,000).
Consumer Confidence Survey
Market watchers are looking forward to the release of the University of Michigan’s August consumer sentiment survey on Friday. The survey reflects the disparity between the robust U.S. economy and households’ financial well-being.
In July, expectations for inflation next year hit a three and a half-year low of 2.9%. The anticipated reading for August is 67.5, slightly higher than the previous level.
Consumer sentiment is particularly sensitive to inflation, while consumer confidence is more influenced by the labor market. This data indicates that cryptocurrencies may react differently based on consumer concerns about job security amid inflation and high interest rates.
Overall, the relationship between cryptocurrencies and the U.S. macroeconomy is multifaceted. Market reactions to data releases can be unpredictable, influenced by factors leading up to the release date.
For instance, if the market anticipates a certain number to increase, traders may act on that data, resulting in cryptocurrency price reactions that differ from expectations.
Bitcoin Price Prediction
Over the weekend, Bitcoin surged to $61,858 before retracing back to the $58,000 range, possibly influenced by lower trading volumes. The upcoming U.S. economic data presents opportunities for traders and investors, with a potential buying opportunity as Bitcoin re-enters demand territory, provided that $55,313 remains a support level. However, momentum indicators like the Relative Strength Index (RSI) indicate uncertainty regarding upward movement.
Positive macroeconomic developments in the U.S. might fuel optimism, potentially driving up Bitcoin prices and the broader cryptocurrency market once again.
Read more: How to buy Bitcoin (BTC) and everything you need to know
If the support at $55,313 is breached and the price closes below it on the daily chart, Bitcoin could see further declines, potentially testing support levels below $52,398.
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