Stubborn inflation, sky-high interest rates, no recessions, sideways price action and, above all, a whole mountain of uncertainty. The macroeconomic climate makes it difficult for us as investors to make good decisions, but it seems that next Friday will be another crucial moment for the bitcoin price.
Next Friday it will be time again for the unemployment figures from the United States.
Would you like to learn more about macroeconomic developments and join the discussion with our experts? Then take a look at our Premium information page and try the first 30 days for free.
Friday crucial for bitcoin price
You have undoubtedly noticed that almost all Western central banks have significantly increased interest rates from around March 2022. In the United States, for example, the interest rate is currently in the range of 5.25 – 5.50 percent.
For that reason, many people expected that we would be in a recession by now, but so far this has not happened. An important reason for this appears to be the strong American labor market. Consumption in America – despite the interest rate increases – remained stable and unemployment is therefore still low.
We’ll get the new US unemployment rate on Friday. In August, that figure shot up from 3.5 to the current 3.8 percent. Now it will be exciting and we will see whether unemployment continues this increase (which would indicate a recession) or whether we remain stuck at this number.
Predictions range from 3.7 to 3.8 percent; which would mean that this month is not too bad. But of course we are here to discuss the impact of this on the bitcoin price.
What does that mean for the bitcoin price?
It is difficult to predict in advance what exactly this will mean for the bitcoin price. Basically, the macroeconomic environment at the moment is negative for bitcoin. The high interest rates make it relatively attractive for investors to invest in American government bonds. These currently provide a practically guaranteed return of ~5 percent.
Investors no longer have to take excessive risks to beat inflation, which was the case over the past 10 years. Bitcoin and other risk assets such as shares benefited enormously from this.
Now the climate is different and we actually have to wait for lower interest rates. In that respect, it might be good for bitcoin in the long term if there is a recession, because central banks will have to intervene again with lower interest rates.
A recession will also hit bitcoin initially, but if the interest rate cuts fall around the time of the April 2024 halving; then a very nice bull run could start.
Stay one step ahead of the crypto market with a Premium membership
In the Premium environment of Crypto Insiders, our analysts and members talk about the impact of this economic data on the crypto market and of course the bitcoin price. You can also ask questions to experienced traders here and our analysts share 20 exclusive technical analyzes of an extensive range of cryptocurrencies every week. Take a look at our Premium information page and try the first 30 days for free.
2023-10-01 16:31:28
#Friday #crucial #bitcoin #price
