Crypto market participants have an exciting week ahead with the release of 5 US economic data points starting on Tuesday. The market is buzzing with anticipation on how these events will impact Bitcoin (BTC) and the broader crypto markets.
The influence of US macro data on Bitcoin remains significant, following a period where its effect seemed to have waned in 2023.
Consumer Confidence
First up this week is the consumer confidence survey on Tuesday, January 28. This survey provides insights into potential spending trends, consumer attitudes, purchasing intentions, and vacation plans.
Projections suggest a median forecast of 106.3, up from the previous 104.7. Improved consumer confidence indicates a willingness to spend more, potentially boosting economic activity and attracting more investments into cryptocurrencies like Bitcoin.
Conversely, a decrease in consumer confidence could lead to reduced spending and investments, paving the way for a more accommodative approach by the Federal Reserve. This scenario could be favorable for Bitcoin as investors seek alternative stores of value and inflation hedges.
The FOMC and Fed Chair’s Speech
In addition to consumer confidence, the crypto markets are closely watching the Federal Open Market Committee's (FOMC) interest rate decision on Wednesday, January 29. This decision comes amidst contrasting views between President Donald Trump, who is pushing for rate cuts, and Fed Chair Jerome Powell, signaling status quo.
The high probability of a 25-basis-point rate cut as indicated by the CME FedWatch tool sets the stage for potential market volatility during the press conference with Fed Chair Powell.
GDP
On Thursday, January 30, the US GDP report will be released, with a median forecast of 2.5%, down from the previous 3.1%. A positive GDP revision could signify a robust economy, prompting investors to allocate more capital to riskier assets like Bitcoin.
Initial Jobless Claims
The initial jobless claims report on Thursday will provide insights into the US labor market's health. A higher-than-expected number of jobless claims could signal economic instability, driving investors towards assets like Bitcoin as a hedge.
Personal Income and PCE Index
On Friday, the US BEA will release personal income, spending, PCE index, and core PCE data. Weaker personal income and spending, along with softer inflation figures, could indicate an economic slowdown, prompting the Federal Reserve to consider pausing interest rates to stimulate growth.
A higher core PCE index may lead to inflationary concerns, prompting investors to diversify into assets like Bitcoin. Conversely, lower inflation figures could lessen demand for cryptocurrencies as investors opt for more stable investments.
BTC Price Performance
Ahead of these economic events, BTC was trading at $100,355, showing a 5% decline since the beginning of the week.