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Important evens for Bitcoin and crypto this week

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As expected by the vast majority of analysts in advance, the US Federal Reserve and the European Central Bank (ECB) adjusted their key interest rates by 25 basis points and 50 basis points respectively. So there were no surprises on the part of the currency watchdogs in the USA or in Europe. However, US Federal Reserve Chairman Jerome Powell was “more deaf” than market experts suspected in the subsequent press conference.

Despite mostly weaker quarterly figures from Amazon, Apple and Alphabet, the US stock market also remained robust. The social media giant Meta, on the other hand, was able to surprise positively. Although the Metaverse division posted another quarterly loss of $4.3 billion, the stock price shot up a remarkable 28 percent by the end of the week. On the one hand, the advertising revenue on the social platforms was convincing, on the other hand, it was the announcement of a $40 billion share buyback program and planned efficiency increases by CEO Mark Zuckerberg that convinced investors.

Apple boss Tim Cook was also able to put the negative price reaction into perspective after the publication of the weak company figures in the subsequent conference call, as better iPhone sales are expected in the important sales market China in the coming quarter. However, the Bitcoin price did not follow the significant increases in the stock market as a result of a massive increase in new US employment figures and a falling unemployment rate at the end of the week and even slipped to around 22,800 US dollars yesterday, Sunday. The crypto currency was not able to break through the strong resistance level at 24,200 US dollars for the time being. One reason for this is likely to be the resurgent US dollar index (DXY).

The following economic data are in focus this week

After many important economic and company figures, investors can expect an uneventful trading week. Although Fed Chairman Powell will appear in front of the cameras again on Tuesday, hardly any new impetus can be expected here. In the second half of the week, the focus on Thursday will be on the advance release of the latest inflation figures (CPI) for Germany and the release of fresh figures on initial jobless claims in the USA. At the end of the week on Friday, consumer expectations and US consumer confidence will be published by the University of Michigan.

Press conference by the head of the US Federal Reserve

Tuesday, February 7, 2023: On the second trading day of the week, Jerome Powell appears again in front of the cameras. It remains to be seen whether the supreme currency guardian will underpin the Federal Reserve’s hawkish monetary policy with new statements after the strong US labor market data and thus put its somewhat more dovish outlook on monetary policy into perspective. The continuing resilience of the job market undoubtedly expands the future monetary policy space of the Federal Reserve. However, Powell and his colleagues will want to await the release of the latest US consumer price data next week before bringing further action into play. It is also important for Powell to keep an eye on developments in China, since a renewed increase in the US inflation rate is likely to be initiated by increasing demand for commodities in China. The market could only react more sensitively if Powell unexpectedly sets new impulses in his speech and hints at a faster rate cut.

Inflation data from Germany and US labor market data in focus

Thursday, February 9, 2023: At 08.00 (CET), the Federal Statistical Office will first present the advance publication of the consumer price indices (CPI) for Germany in January. After a steady decline to the last 8.6 percentage points, the market experts expect an increase to 9.2 percent for the month of January. The forecast for the latest inflation rates had actually been expected in the previous week, but was pushed back by one calendar week at short notice. If the analysts are right and the inflation rate in Germany rises back above the 9 percent mark, this should be seen as the first setback and at the same time a sign that the end of rising consumer prices is not yet a thing of the past.

A bearish reaction on the stock markets in Germany and the euro zone could result and lead to a renewed weakening of the common currency, the euro. As a result, the US dollar could confirm its bullish comeback of the previous week and continue to gain strength. This should have a negative effect on the Bitcoin price and also expand the price consolidation of the last few trading days. If, on the other hand, the published consumer price indices are well below the forecast advance publications and even fall below the most recently announced inflation rate of 8.6 percentage points, this could act as additional tailwind for the crypto sector, as the euro should then continue to make up ground against the US dollar.

At 2:30 p.m. (CET), market participants will then also watch the publication of the initial jobless claims in the USA. In addition to the large labor market report (NFP) presented last week, the first receipt of unemployment benefits is the second relevant measure for assessing the US job market. Compared to the previous week, the forecast was adjusted by 11,000 initial applications to 194,000 applications. In January, however, the number of reported new claims was consistently lower than expected, which would be consistent with the labor market data presented last Friday. If, contrary to expectations, the estimate of the experts is exceeded and more citizens in the US apply for unemployment benefits, the Fed could consider fiscal relief to counteract a renewed deterioration in the labor market situation.

US consumer confidence and consumer expectations to close the week

Friday, February 10, 2023: At 4:00 p.m. (CET), market participants will look at the final figures on consumer confidence and consumer expectations for private households for the current month of January. At the Jan. 13 advance release, US Household Consumer Confidence rose further, beating analysts’ expectations, to come in at 62.0, well above the forecast of 59.5. If the final figures for consumer confidence in January are in the range of the expert estimates of 62.9 or even exceed them, this would probably also be viewed positively. If private households also continue to have confidence in economic development in 2023 despite the difficult economic outlook, consumer behavior, which has recently been weakening, could improve again in the coming months.

If the final figures on consumer expectations presented at the same time as consumer confidence confirm this trend and the updated analyst expectations of 64.9 are met or exceeded, sales development at Amazon and Apple should improve again in the first quarter of 2023 after the last weak sales figures in the Christmas quarter.

If strong survey data from the University of Michigan lead to continued bullish price development in the S&P500 and the Nasdaq technology index, investors in the crypto sector will still have to wait and see whether the prices of Bitcoin, Ethereum (ETH) and Co. will continue their price rally after a breather in the previous week be resumed from the beginning of the year. If, on the other hand, the forecasts for consumer confidence and consumer behavior are well below expectations, a price consolidation on the crypto market, which is overdue for many investors, cannot be ruled out. Since the beginning of the year, all economic data has been interpreted rather bullishly by the market. The final data from the University of Michigan for the trading month of January will again put to the test whether this development can be maintained and whether “good news” or “bad news” will continue to be ignored by the market players.

All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.

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