Bitcoin (BTC) shot up about 11 percent last week and is back near $30,000 at the time of writing. This coming week could be crucial for the bitcoin price and that is why it is extra important to take a closer look at the major macroeconomic data points.
What will we be presented with next week?
New interest rate decision from the European Central Bank The favorite inflation gauge of the US central bank The US gross domestic product (GDP) A range of PMIs (important health indicator of the economy)
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Important period for bitcoin price
Last week, US Federal Reserve Chairman Jerome Powell made some stern remarks during a speech in New York. If inflation remains at the current level, and the economy and the labor market remain intact, he believes it is quite possible that we will see new interest rate increases.
However, the market no longer seems to believe this, as we can also see from the bitcoin price. If the US central bank actually raises interest rates, the bitcoin price would not behave as it does now.
Although this of course also has to do with the optimism surrounding the spot bitcoin ETF. It looks like Cointelegraph’s fake news about the approval of a spot bitcoin ETF in America is paying off.
The market has had a taste of what an actual approval could mean for bitcoin.
What can we expect next week?
Investors hope that bitcoin will… bullish momentum can continue next week. To this end, it is important that the ECB does not increase interest rates further. The chance of this seems high, as the ECB has little room to further increase interest rates due to its weak counterparts within the Eurozone (think of Italy).
It is therefore expected that the ECB will have to cut interest rates again much sooner than the US Federal Reserve in order to slow down a recession. That is why we see that the US dollar is performing so well against the euro.
Furthermore, the GDP for the American economy is on the agenda. This should arrive on Thursday and the expectation is economic growth of 4.3 percent for the past quarter (extended on an annual basis).
That is gigantic growth and it also explains why the US dollar is doing so well at the moment. This gives the US central bank room to keep interest rates at this elevated level for even longer.
The only disadvantage of the strong economy is that it also keeps inflation at a higher level (after all, people continue to consume). That is less good news for the bitcoin price, because we will have to make do with these increased interest rates for longer.
Sometimes it seems like we can’t beat this inflation without a recession… and that’s a dark conclusion.
2023-10-22 14:15:31
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