Cryptocurrency markets continue to react to US economic events as traders and investors adjust their strategies based on macroeconomic data. Although the schedule includes several releases, only a few will be of interest to Bitcoin (BTC).
Meanwhile, Bitcoin remains range-bound, trading well above the psychological $60,000 level, but $64,000 is proving impenetrable.
CPI
The highlight of this week’s U.S. economic data will be the Thursday, October 10 report from the U.S. Bureau of Labor Statistics (BLS), which will release September Consumer Price Index (CPI) data.
The Federal Reserve’s (Fed) interest rate outlook continues to put inflation in the spotlight for crypto and stock markets. Economists expect headline inflation to rise 0.1% for September. They also forecast a 0.2% increase in the core CPI, the most closely watched U.S. economic data that strips away volatility in food and energy costs.
The year-on-year headline CPI rate is expected to decline to 2.3% from 2.5% in August. On the other hand, the core figure is expected to remain stable at 3.2% year-on-year in September.
Learn more: How to protect yourself from inflation using cryptocurrency.
However, if Thursday’s data is warmer than expected, it would suggest a potential resurgence of inflation in the coming months. This could limit the pace at which the Fed can further cut its key rates and, more importantly, reduce the chances of further Bitcoin rally.
“We DO NOT WANT to see inflation pick up. Inline would probably be the best solution,” said Ted Zhang, associate portfolio manager at Revere Asset Management.
PPI
The US BLS will also release the core Producer Price Index (PPI) for September this week. This data determines price increases at the producer level. Its influence on financial markets comes from the fact that it measures inflation at the wholesale level.
The data would provide important insights into inflationary pressures at the producer level of the supply chain. By tracking changes in producer prices, analysts and policymakers can better understand potential future trends in consumer prices.
An increase in PPI would indicate an increase in production costs, which could lead to increased energy and material costs required for crypto mining and processing. As such, a higher core PPI on Friday could negatively affect Bitcoin and crypto.
Initial Unemployment Claims
The Labor Department will also release the first jobless claims on Thursday, following last week’s megahit September jobs report. It turned out that the US economy created 254,000 jobs, far exceeding expectations. The unemployment rate fell to 4.1% from 4.2% in August.
This could set the tone for the economy for a soft landing, a relatively rare achievement for the Fed. During a soft landing, inflation slows without triggering a recession.
Meanwhile, amid falling inflation and positive jobs data, investors are reducing their bets on future Fed interest rate cuts. The general worry is that the central bank might have made a policy mistake by cutting interest rates by 50 basis points last month. The risk for the market is that the Fed may have been too aggressive in cutting rates as inflation has not yet been defeated.
Third quarter results
As a bonus to US economic data, the third quarter (Q3) corporate earnings season begins this week. Results from major financial companies like JP Morgan Chase (JPM), Wells Fargo & Co. (WFC) and BlackRock Inc. (BLK), due Friday, could also move markets.
Read more: Who owns the most Bitcoin in 2024?
As the cryptocurrency market prepares for potential changes, Bitcoin is trading at $63,533, reflecting a 2.47% increase over the past 24 hours.
Disclaimer
In accordance with the Trust Project guidelines, BeInCrypto is committed to providing unbiased and transparent reporting. This news article aims to provide accurate and current information. Readers are, however, advised to independently verify the facts and seek professional advice before making any decision based on this content. Please note that our Terms and Conditions, Privacy Policy and Disclaimer have been updated.
