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Important events for Bitcoin and crypto this week

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Driven by the continued recovery of the US technology index Nasdaq, Bitcoin (BTC) and above all the altcoin sector showed their bullish side in the past trading week. Strong sales figures from the carmaker Tesla, together with better than forecast US economic data, had a positive effect on the stock and crypto market in the second half of the week. In particular, incoming orders for durable goods coupled with a solid housing market were able to convince investors. As a result, the Bitcoin price reached a new monthly high of $ 23,966 yesterday evening.

Earnings season in the US is peaking

This week, some of the largest US technology companies are presenting fresh company figures for the past Christmas quarter. In addition to the social media giant Meta, formerly Facebook on Wednesday, investors are primarily looking at the results and outlook of Apple, Amazon and Google’s parent company Alphabet. Whether these four tech giants can meet their sales and profit expectations is hard to tell. Meta and Alphabet have recently suffered from declining demand for online advertising. At Alphabet and Amazon, similar to Microsoft in the previous week, the lame driving force cloud storage, the quarterly figures and especially the outlook for the coming trading quarters could be shattered.

Although this area should continue to represent the cash cow of these companies and generate a significant portion of the quarterly profit, this sector could grow less strongly in 2023 than analysts expected. Based on the good, but also declining sales of the credit card providers Mastercard and Visa, the sales figures for Apple and the largest online retailer Amazon could also be below the expectations of the market experts. At Apple, the shutdown of iPhone contract manufacturer Foxconn due to a Covid outbreak in December may also have a negative impact on sales figures.

Market participants are focusing on the following economic data

This week, investors are spellbound by the interest rate decisions made by the major central banks, the Fed and the ECB, in the middle of the week. Before the US Federal Reserve publishes its interest rate decision on Wednesday evening, however, market participants look at the latest US consumer confidence figures the day before. Then, on Wednesday evening, the focus will be on the supreme currency guardian in the USA, Fed Chairman Jerome Powell. More than ever, the market players should be glued to his every word at the press conference. His European counterpart, ECB President Justine Lagarde, will be in the spotlight on Thursday. The statements by the two central bank chairmen are likely to have a significant impact on the financial markets. The major US employment market report (NFP) will be published on Friday.

US consumer confidence figures

Tuesday, January 31, 2023: On the second trading day of this week, the Conference Board (CB) will publish new figures on US consumer confidence for the trading month of December. The degree of optimism about economic development in the USA had risen again significantly at 108.3, contrary to the forecasts. For the month of January, the analysts expect further increasing optimism among consumers and expect 109.0. Should this value be reached or even exceeded, the US dollar index (DXY) is likely to recover from its ongoing weakness in the short term, which could have a negative impact on price developments in the crypto market. On the other hand, if the analysts’ expectations are missed, this will again have a negative effect on the strength of the US dollar, which in turn would be positive for the prices of Bitcoin and Co.

Interest rate decision and press conference by the US Federal Reserve

Wednesday, February 1, 2023: At 8:00 p.m. (CET), market players are spellbound by the interest rate decision by the Federal Reserve in the USA. At 8:00 p.m. (CET), the US monetary authorities will announce their latest interest rate adjustment. According to CME FedWatch Tool A remarkable 99.2 percent of analysts expect interest rates to rise by 25 basis points. It remains to be seen whether the decision has already been priced in and whether Fed Chairman Powell will surprise market participants. In view of the recent significant decline in US inflation rates in the USA, a pause at currently 4.5 percentage points cannot be completely ruled out. However, a few market experts do not consider an interest rate hike of a further 50 basis points to be impossible due to the persistently strong labor market data in the previous week. They suspect that if the Chinese economy were to open up completely, raw material prices on the world markets could increase significantly and, as a result, inflation rates could rise again.

Any deviation from the interest rate adjustment that is considered “safe” by +0.25 percent to 4.75 percentage points should therefore lead to turbulence on the markets. A price explosion as well as a sharp correction on the stock and crypto market could be the result. In particular, Powell’s subsequent press conference at 8:30 p.m. (CET) could provide clarity about central bank policy in the USA. Experts will scrutinize Powell’s remarks on the Fed’s monetary policy over the coming months to derive possible clues to a possible change in fiscal policy stance.

Key rate decision by the European Central Bank

Thursday, February 2, 2023: At 2:15 p.m. (CET), market participants are looking to Brussels. The ECB announces its first interest rate decision in the new trading year. In view of the fact that the inflation rate in the euro zone is still in the double digits (most recently 9.1 percent), analysts expect interest rates to be adjusted by a further 50 basis points to 2.50 percent. A lower increase of only 0.25 percentage points can almost be ruled out. If, on the other hand, the monetary watchdogs increase the key interest rate by 75 basis points, the euro-dollar exchange rate should gain strength in an initial reaction. The associated consolidation of the US dollar index DXY could subsequently have a stabilizing effect on share and crypto prices. As they did the day before at the Fed’s press conference, market players will listen closely to what ECB boss Lagarde will announce about the development of monetary policy measures in Europe.

US jobs report at the end of the week

Friday, February 3, 2023: The last day of the first week of trading will be followed by the release of US nonfarm payrolls for the month of January. The experts expect a drop to 183,000 employees. The forecast is thus well below the most recently published employment figures from December. Most recently, 200,000 new jobs were expected to be created three times in a row. Each time, this estimate has been significantly exceeded. In December, 223,000 new jobs were created.

If the market experts are correct with their forecast for January and the non-agricultural job market cools down noticeably, the probability of an imminent recession should increase again in the coming months. Weak NFP numbers could reinforce the US dollar’s correction again, which should give the already rising Bitcoin price additional tailwind. If the labor market remains resilient as in the previous months and is above expectations, this does not necessarily have to lead to a correction on the stock and crypto market. After the publication of the last robust figures at the beginning of the year, the stock and crypto markets trended north in lockstep.

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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