Participants in the cryptocurrency market, including traders and investors, should prepare for a variety of US economic reports this week, which could influence their investment portfolios. Significant occurrences this week could incite volatility following the US CPI (consumer price Index) from the previous week.
On the other hand, Monday’s US President’s Day will result in markets being closed, yet Bitcoin (BTC) will remain available for trading continuously.
US Economic Events on the Crypto Calendar This Week
As the impact of US economic data on cryptocurrency markets continues to be significant, traders and investors must keep an eye on the following data releases this week.
January FOMC Minutes
The Federal Reserve (Fed) will disclose the minutes from the FOMC (Federal Open Market Committee) meeting held in January on Wednesday, February 19. This document is among the most crucial US economic data this week, as the comments made by policymakers could assist markets in assessing the Fed’s interest rate projections.
The minutes come in light of recent reports indicating CPI inflation rose month over month. This effectively conveyed unfavorable news in the short term, resulting in negative sentiment in the cryptocurrency markets. Nevertheless, there are no significant signs of a resurgence in inflation.
Fed Chair Jerome Powell informed a Senate Banking Committee that he is not in a rush to lower interest rates. President Donald Trump advocated for more substantial rate cuts to mitigate high inflation, but Powell remained steadfast.
Market participants are now preparing for further modifications as they await additional policy updates. The January FOMC minutes may offer insights into whether rate reductions are forthcoming or if policymakers are leaning towards more hawkish indications.
“The minutes are widely anticipated to reflect Powell’s testimony regarding economic circumstances before the Senate last week,” stated financial market analyst Atif Ismael.
Initial Jobless Claims
In addition to the January FOMC minutes, the cryptocurrency market will also monitor initial jobless claims released on Thursday, providing insight into the labor market in the US. For the week ending February 15, new unemployment insurance applications filed by US citizens totaled 213,000.
This figure fell short of initial projections and was below the previous week’s adjusted figure of 220,000. According to the US Department of Labor (DoL), the report highlighted a seasonally adjusted insured unemployment rate of 1.2%. MarketWatch data indicates a median forecast of 215,000 for this week’s initial jobless claims.
A rise in initial jobless claims in the Thursday report signifies increased economic distress and a declining labor market, which could lead to reduced consumer expenditure. This downturn prompted the Fed to contemplate rate cuts to invigorate the economy.
As rates decrease, borrowing becomes less expensive, potentially augmenting spending and investment. This scenario benefits Bitcoin, as lower rates can heighten demand for alternative assets.
Consumer Sentiment
The US Consumer Sentiment Index, especially the preliminary report, captures consumers’ overall faith and optimism regarding the economy. The University of Michigan is set to release this information on Friday.
A positive result on Friday could elevate optimism in financial markets, including cryptocurrency. This might lead to an increased demand for Bitcoin as investors hunt for assets with growth potential.
Conversely, if consumer sentiment proves strong, it may suggest that consumers are more inclined to spend and take risks. This favorable outlook may translate into an increased risk appetite among investors, potentially compelling them to allocate more resources to cryptocurrencies such as Bitcoin.
Nonetheless, it is essential to acknowledge that consumer sentiment data frequently comprises information on inflation expectations. Thus, the FOMC minutes on Wednesday will be of great significance. If consumers foresee heightened inflation, they may seek alternative stores of value to safeguard their wealth. Bitcoin, often referred to as “digital gold,” may experience a surge in interest as a hedge against inflation.
However, prior to the release of the economic data, Bitcoin (BTC) was trading at $95,984, experiencing a decline of 1.58% since the opening of Monday’s session.
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