Table of Contents
This week despite because of the ongoing liquidity problems of various US banks and the takeover of the major Swiss bank Credit Suisse by Swiss UBS Bank, the key crypto currency is still bullish and was able to rise to a new high for the year late on Sunday evening, March 19th. At its peak, the Bitcoin price rose by almost 38 percentage points to $ 28,478 in the last seven trading days, following the precious metal gold, which also reached a new high for the year at the end of the regular trading week. Despite a key interest rate increase by the European Central Bank (ECB) by a further 0.50 percent to 3.50 percent, investors held on to their Bitcoin positions and, in view of further dangers in the banking sector, seem more than ever to rely on digital gold as a safe, FIAT- To put money independent store of value. Around 15 years after the bankruptcy of the major US bank Lehman Brothers, Satoshi Nakamoto’s vision could increasingly come true and more investors would rather manage their savings themselves in order to be protected should the banking crisis escalate.
The following economic data will be relevant this week
The new reporting week starts on Tuesday with the publication of new sales figures for US existing properties in February. The key interest rate decision by the US Federal Reserve Bank (Fed) follows a day later. In view of the insolvency of several US banks, the supreme monetary authority in the USA, Fed Chairman Jerome Powell, is more than ever at the center of the global financial market. At the press conference that follows, investors will follow closely what the Fed chair says about future monetary policy. A significant increase in volatility on the stock, currency and crypto market must be planned for. The current sales figures for new properties in the USA will follow on Thursday. Closing the week on Friday will be the latest US Durable Goods Orders for February.
US housing market in focus
Tuesday, March 21, 2023: At 3:00 p.m. (CET), the National Association of Realtors presents the latest sales figures for existing properties for the month of February. The data collected describe the condition of the real estate market, which is so important for the USA, and therefore provide a good insight into economic developments. If the sales figures are above expert expectations, this indicates increasing consumer spending and a stabilization of the US economy. If the forecasts are missed, it would be confirmation that the housing market will continue to cool down. The expert forecast is 4.17 million home sales and thus above the clearly missed figure of 4.00 million from January. Should the published figures match or even exceed the estimate, the US dollar could extend last week’s weakness. This should once again have a positive effect on the crypto market. On the other hand, weak data from the housing market led to a recovery in the US dollar in the previous month, which could act as a headwind for the price development of Bitcoin and Co.
Fed interest rate decision in the US midweek
Wednesday, March 22, 2023: At 7:00 p.m. (CET) the interest rate decision of the Federal Reserve in the USA is due. The US monetary authorities announce their latest interest rate adjustment. Loud CME FedWatch Tool the majority of analysts only expect an increase of 0.25 percentage points. In the days before the bankruptcies of the three US banks, the majority of market participants had still expected 50 basis points. In view of the problems in the banking sector and the ongoing liquidity pass, Fed boss Powell is under massive pressure and is increasingly being criticized by politicians. Many market players are calling for a move away from his hawkish monetary policy. However, should he pause the rate hike, the market could take a negative view of that as well, threatening to sideline inflation in favor of banking sector woes.
This could lead to further turbulence on the markets. In Powell’s subsequent press conference at 7:30 p.m. (CET), the head of the Fed must clarify central bank policy. Although the Fed presented the Bank Term Funding Program (BTFP) in a concerted action with the US Treasury last week, which can be used to provide up to USD 3 trillion in liquidity for the banking sector, the market only calmed down for a short time. The aim of the program is to increase confidence in the monetary system and thus avert a wildfire. In addition, the banking system should be stabilized and, if necessary, provided with sufficient liquidity should there be further bottlenecks, such as at the Silicon Valley Bank (SIVB). Experts will take a close look at Powell’s comments on this topic and future monetary policy in the coming months in order to derive possible indications of a change in fiscal policy that is needed in the short term.
Real estate sales in the USA
Thursday, March 23, 2023: At 3:00 p.m. (CET) the latest sales figures for new homes in the USA will be presented. Real estate sales are considered a good indicator of the current level of consumer spending and the state of the real estate sector. If house sales are weaker than the 648,000 single-family houses expected by the experts, this would indicate a deterioration in consumer spending and weakness in the housing market and thus in the construction industry. In the previous month, the number of houses sold was 670,000, above expectations of 620,000. Should the weakness in the real estate market increase again after stabilizing in the previous months, the US dollar should also come under further pressure, which should have a positive effect on the Bitcoin price.
Core rate of new orders for durable goods in the US
Friday, March 24, 2023: At 13:30 (CET) the final figures for February core durable goods orders will be announced. After a significant month-on-month increase of 0.7 percentage points, the core rate came in 0.5 percent month-on-month above analysts’ expectations. A slight increase of 0.2 percentage points is forecast for February. If the figures are in line with the forecasts and incoming orders continue to rise, the US dollar should trend somewhat stronger. Since the stock market has recently been trending bullish after strong incoming orders, it is difficult to predict how the market could develop as a result of weak data. If the US dollar continues to fall as a result of the published figures, this should give the Bitcoin price additional momentum. Any weakness in the US Dollar Index (DXY) should provide an additional boost for the cryptocurrency.
