The current downturn in Bitcoin prices highlights the increasing volatility and uncertainty within the cryptocurrency market. As Bitcoin experiences additional downward pressures, the market prepares for a series of important economic reports this week that could sway prices.
Bitcoin Prices in Flux as Market Anticipates Key Economic Reports
Following several weeks of robust performance, Bitcoin’s recent price decline has sparked concerns regarding potential further declines and the advent of a bear market. The upcoming days will play a pivotal role in determining whether BTC can rebound from its current bearish state or drop even lower.
In light of current market conditions, The Kobeissi Letter, a prominent source of commentary on global capital markets, has taken to X (formerly Twitter) to identify six significant economic events that could influence the broader financial and cryptocurrency landscapes.
The first event on their list is the Job Openings and Labor Turnover Survey (JOLTS), set to be published on Tuesday, February 11. This data reflects the number of job openings in the United States (US). A thriving labor market is often indicative of a stable economy, which could delay additional rate cuts from the FED and challenge Bitcoin and other digital assets.
Another essential report being released on the same day is the short-term energy outlook from the Energy Information Administration (EIA), which sheds light on fuel supply and demand. Although this report might not be a direct catalyst for cryptocurrency, fluctuations in energy prices can affect inflation, subsequently impacting FED policies that influence Bitcoin prices.
On Wednesday, the February Consumer Price Index (CPI) inflation data will be released. This critical report measures consumer-level inflation and is crucial for forecasting future FED rate cuts. Should the CPI exceed expectations, it could have a detrimental effect on Bitcoin, conveying a message of persistent inflation and potentially postponing monetary easing.
The following major data point to be unveiled on Thursday is the weekly jobless claims report. Should claims continue to rise, it may suggest an economic slowdown, thus heightening the expectation of a rate cut and providing a boost for Bitcoin.
Additionally, on the same day, the February Producer Price Index (PPI) will be released. This report gauges inflation at the wholesale level. A PPI figure that exceeds expectations could adversely affect Bitcoin and may lead to further dips by diminishing the chances of imminent FED rate cuts.
Final Economic Report Set for This Week
As the market closely monitors the latest reports on pivotal economic events, Bitcoin continues to experience heightened volatility. Its price has fallen another 2.28% within just 24 hours. Over the last month, the leading cryptocurrency has plummeted by 17.22%, bringing its price down to $80,380, per CoinMarketCap.
If the impending economic reports do not favor the market, Bitcoin risks further price declines, as bearish sentiment could intensify. The last significant financial report scheduled for Friday, February 14, is the Michigan Consumer Sentiment Index. This measures consumer confidence in the economy.
A drop in sentiment could indicate economic uncertainty, potentially placing downward pressure on Bitcoin prices, particularly as investors gravitate towards safer assets. Conversely, a low sentiment could also provide support for Bitcoin if it raises expectations of a FED rate cut.
Featured image from Unsplash, chart from Tradingview.com
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