Important events for Bitcoin and crypto in week 12/06 – 16/06 2023
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Despite a massive sell-off in the altcoin sector, the price of Bitcoin (BTC) was able to hold its own for the time being and once again defended the important support area around 25,300 US dollars. A few hours before the end of the week on Sunday evening, the crypto currency was trading at around 26,000 US dollars, around two percent above its weekly low. Despite this relative strength, the technical situation for Bitcoin is more precarious than it has been for a long time. An increasing number of altcoin projects have been classified as unsecured securities by the Security and Exchange Commission (SEC) in the past few days. In view of the negative news, the crypto space was recently unable to benefit from the positive price development on the US stock market. Rather, significant long liquidations of leveraged bets amounting to several hundred million US dollars in many altcoins such as Cardano (ADA), Polygon (MATIC) and Solana (SOL) caused drastic price setbacks of more than 20 percentage points in the meantime. Only Bitcoin, number two Ethereum (ETH) and, surprisingly, Ripple (XRP) were able to pull themselves out of the affair with single-digit price drops in a weekly comparison.
The following economic data will be relevant this week
The third week of trading in June represents the high point of this trading month. First, the latest data on US consumer prices will be announced. The key interest rate meeting of the US Federal Reserve Bank (Fed) will follow in the middle of the week. In the second half of the week on Thursday, the European Central Bank (ECB) will then announce its interest rate decision for the euro area. The trading week will be rounded off by final inflation data for the euro zone in May.
US consumer prices at the start of the week
Tuesday, June 13, 2023: The US Bureau of Labor Statistics will present the latest US inflation data for the month of May tomorrow, Tuesday. Most recently, consumer prices followed the downward trend of the first five months of trading and, at 4.9 percent, slipped back below the important 5.0 percent mark for the first time. For the past month of May, the market experts expect a further decline to 4.7 percent. If the analysts’ expectations are met or even undercut, the chances of a pause in the Fed’s interest rate adjustment tomorrow, Wednesday, will improve further. The US financial market should benefit from declining inflation rates and ideally also stabilize the crypto market. However, investors will also look at the development of the core inflation rate and consumer prices in a monthly comparison. These recently did not develop as expected by the US monetary authorities and remained at an elevated level. Although the experts are expecting a slight decline for the month of May, an unexpected increase in consumer prices could persuade investors to increasingly part with risky asset classes such as the crypto sector, as the US Federal Reserve could possibly react with a further interest rate hike .
Fed interest rate meeting midweek
Wednesday, June 14, 2023: At 20:00 (CET) there will be a showdown. The US Federal Reserve announces its latest interest rate decision. Most recently, the Fed stuck to its hawkish monetary policy and adjusted the key interest rate by a further 25 basis points to 5.25 percent. If the inflation rate had fallen further on the previous day, the US key interest rate would increasingly be significantly higher, which should reduce the likelihood of a further interest rate hike. Go currently according to CME Watchtool only 29 percent of the market participants expect the key interest rate to be adjusted by a further 25 basis points. In view of the continued subdued prospects for the US economy of late, caused by increasing interest rate risks in the US housing market, the vast majority of the investors surveyed expected interest rate adjustments to be suspended. Although Powell had already dismissed hopes of an end to aggressive monetary policy at the last Fed press conference in May, the latest statements by several Fed members indicate mixed opinions about monetary policy in the coming months. It remains to be seen whether the tide will turn increasingly back towards looser Fed policy in the coming months. A majority of investors, 64 percent, continue to expect at least one further increase in key interest rates in one of the next two interest rate meetings. A break at this point in time should therefore not be overrated. Nevertheless, the stock market is likely to react with price increases in an initial reaction, which could also have a positive effect on the price of Bitcoin. As with the last interest rate decision in May, investors will try to interpret the statements made by Fed Chair Jerome Powell at the subsequent press conference at 8:30 p.m. An increase in market volatility must therefore be planned for.
ECB rate meeting in the second half of the week
Thursday, June 15, 2023: At 2:15 p.m. (CET), the European Central Bank (ECB) will publish its latest key interest rate decision for Europe. In the previous month, Europe’s top monetary authorities increased the key interest rate by 25 basis points to 3.75 percent. At the fourth interest rate meeting in 2023, the majority of market analysts also expect an interest rate hike of a further 0.25 percent to 4.0 percentage points. Despite a recent decline in the consumer price index to currently 6.1 percent, the ECB may initially have no choice but to successively adjust key interest rates further in the direction of inflation. However, since Europe’s economy officially slipped into recession last week, a pause cannot be ruled out here either. ECB boss Lagarde must act increasingly cautiously to protect the ailing EU economy in order not to risk a sustained economic crisis in the European currency area. Scope for decision-making seems increasingly limited. If the ECB raises the key interest rate by a further 25 basis points, the euro-dollar exchange rate should initially increase, which could have a stabilizing effect on the Bitcoin exchange rate. As on the previous day, investors will primarily be looking at the subsequent press conference at 2:45 p.m. Any statements by Lagarde in the direction of a change in monetary policy in the coming months should lead to an increase in volatility in the stock markets and thus also in the crypto sector.
Fresh inflation data from the euro zone at the end of the week
Friday, June 16, 2023: At 11:00 a.m. (CET), Eurostat publishes the final consumer prices for Europe in the previous month of May. In the advance release on June 1, the inflation rate was 6.1 percent, below the expert forecast of 6.3 percent. The experts are now also anticipating an increase of 6.1 percent year-on-year for the final data. However, with US consumer prices continuing to fall, a surprise is imaginable here. In particular, the recently unexpectedly strong decline in German consumer prices gives hope that inflation in Europe could calm down further. If the final consumer prices for May indicate a sharper decline and are below expert expectations, a positive price reaction on the European stock market is conceivable. The Bitcoin course could also benefit from this. If, on the other hand, consumer prices are listed above the analysts’ forecast and thus rise against expectations, this would be a severe damper in the fight against excessively high consumer prices in the euro zone. Persistently high inflation rates in the countries of Europe would further increase the risks of an economic downturn in the EU economy. Should the European stock markets then correct more significantly, this could also have a negative impact on the price development of cryprocurrencies.
