Important events for Bitcoin and crypto this week

Bitcoin (BTC) price continues to consolidate in a downtrend channel as it did last week. The key crypto currency is therefore still unable to benefit from rising prices on the US stock indices Nasdaq and S&P500. A key reason can be seen in the continued strength of the US Dollar Index DXY. Although the bulls were able to avert a relapse towards the previous week’s low of $25,800, they failed to initiate a liberation towards $28,000. Despite new annual highs for some major technology stocks such as Apple, Meta and Alphabet, the crypto market is currently lacking sustainable price momentum. Bitcoin ended the trading week virtually unchanged at just under $27,000. However, the further decreasing trading range could indicate that a breakout move is imminent.

The following economic data will be relevant this week

The trading week starts tomorrow Tuesday with fresh data from the US housing market. In the middle of the week, the US Federal Reserve (Fed) will publish the minutes of the last interest rate decision on May 3rd. In the second half of the week on Thursday, further figures from the real estate market in the USA will follow. The next day, on the last trading day of the week, investors look to the release of fresh core inflation data for the US.

US home sales to start the week

Tuesday, May 23, 2023: At 4:00 p.m. (CET) the latest new construction home sales in the USA will be announced. Real estate sales are considered an important indicator of the current level of consumer spending and give a good insight into the state of the US housing market. In the previous month, the sales figures stabilized and, with 683,000 properties sold, were well above the forecast of 630,000 house sales. If this trend is confirmed, the US dollar should continue to gain strength and negatively affect the Bitcoin priceworks. With 663,000 properties sold, the estimate for the past month of April is again slightly below the final sales figures for the previous month. If the forecasts are missed, this indicates a negative trend in consumer spending and weakness in the housing market. Poor sales figures would confirm the clearly missed consumer expectations of the latest survey results from the University of Michigan and have a negative impact on the US dollar. As a result , the BTC price should benefit from another correction in the US dollar index DXY.

Fed midweek meeting minutes

Wednesday, May 24, 2023: At 8:00 p.m., the US Federal Reserve publishes the minutes of the last interest rate decision on May 3rd. Investors are hoping for further insights into whether the US monetary authorities could pause or possibly already cut interest rate hikes at the next interest rate meeting on June 14th. At the last Fed meeting, Fed Chairman Powell again emphasized that he was not planning any key interest rate cuts in 2023, but the recently further falling inflation rate is giving the US Federal Reserve increasing leeway in terms of interest rate policy. “Quantitative Easing” (QE) measures could counteract the increasing problems on the credit front and would mitigate the risks of future defaults in the office real estate sector. In addition, the log could provide further information about how Fed members will address the ongoing US banking crisis and resulting liquidity squeeze. Market players will therefore look in the minutes of the meeting for indications of what options the Federal Reserve is planning to intervene should the monetary policy situation in the USA deteriorate further.

Pending home sales in the US

Thursday, May 25, 2023: At 16:00 (CET), the latest sales figures for existing homes in the USA will be released. After sales plummeted by -5.2 percent for the last calculation period, the increased risk of lasting distortions in the US real estate sector was confirmed. Although the analysts expect growth of +0.5 percent, missed estimates could put the stock market and thus the crypto sector under pressure. If, on the other hand, the sales figures for existing homes should be met or even better than expected, this would at least be an indication of an initial stabilization. Since house sales in the first three months of trading were consistently better than forecast, it could only have been a one-off outlier in the previous month. The financial markets should take a positive view of stabilization in the real estate sector, which should also benefit the crypto sector. Paradoxically, even a full-blown housing market crash could lead to rallied stock and crypto markets as market participants may be bullish on the likelihood of a faster rate cut.

US PCE core inflation to end the week

Friday, May 26, 2023: At 2:30 p.m. (CET), the Bureau of Economic Analysis publishes the latest figures on core inflation for the previous month of April. Most recently, the experts forecast an increase in the core rate of +0.3 percent month-on-month. The analysts are also expecting an increase of +0.3 percent in April. If core inflation is higher than expert expectations, investors are likely to rate this negatively, as the US Federal Reserve would have to maintain its hawkish monetary policy to combat inflation. Investors may then decide to reduce their equity and crypto positions. If, on the other hand, the core inflation rate has risen less than analysts expected, the financial market could end the trade watch in a more friendly manner. The Bitcoin courseshould benefit from falling inflation data as in the previous months.

Check our Economic Calendar for other important news