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It initially had an effect in the past trading week after prices on the crypto market continued to fall. Bitcoin price has meanwhile corrected to a new multi-month low of 24,750 US dollars. Once again, there were many liquidations of leveraged long bets, as a result of which the key cryptocurrency threatened to give up its important chart mark at $25,000. In the second half of the week, however, on the day after the key interest rate pause in the USA, the buyer side took heart and heaved the BTC price back above the previous week’s lows of around USD 25,400 towards USD 26,500. The news about the application for a new Bitcoin Spot ETF by the world’s largest asset manager Blackrock last Friday also had a positive effect on the Bitcoin price. From a technical point of view, the dynamic price recovery from the temporary drop in the price in the first half of the week can therefore be seen as a false breakout on the underside. In particular, the weakness of the US dollar index (DXY) may also have had a stabilizing effect here. Bitcoin is currently trading within striking distance of the short-limiting, overriding downtrend line at 26,800 US dollars. The price levels that are now relevant for the chart can be found in the current Bitcoin price analysis. Apart from positive economic data in the new trading week, an agreement between the US Securities and Exchange Commission and the crypto exchanges Binance and Coinbase could spark further upside potential.
The following economic data will be relevant this week
The new trading week will be opened by new data from the US housing market. The preliminary figures for US building permits will be published tomorrow, Tuesday. On Wednesday and Thursday, US Federal Reserve Chairman Jerome Powell will face the annual US monetary policy hearings in the Senate and House of Representatives. The current sales figures for existing properties on the US housing market will also be presented on Thursday. Finally, at the end of the week on Friday, the purchasing managers’ indices from the service sector for the USA will follow.
Building permits in the US at the beginning of the week
Tuesday, June 20, 2023: At 2:30 p.m. (CET) this will be presented
Census Bureau releases preliminary estimates of US building permits for the month of May. The number of permits granted is considered a leading indicator of the health of the US housing market. In the previous month, the final number of new building permits was in line with expert expectations. Nevertheless, the US stock indices corrected by around three percentage points and also caused Bitcoin to fall by a good four percent. The analysts expect the situation on the real estate market to improve slightly in May. Compared to the previous month, the experts forecast a slight increase from 1.417 million in April to 1.435 million in May. If, as expected, the number of building permits issued is higher than in the previous month, the US stock market and with it the Bitcoin price could increase in value. If, contrary to expert assumptions, the number of building permits granted is below expectations and the real estate sector continues to cool down, a course correction in the US stock indices and thus the chances of a new weakness in the crypto market cannot be ruled out.
Fed Chairman Powell answers questions from US politicians
Wednesday & Thursday, 21./22. June 2023: Traditionally, the Chairman of the US Federal Reserve Bank (Fed) answers questions from politicians on the assessment of the economic and financial policy of the Federal Reserve Bank (Fed) in hearings lasting several hours. At 4:00 p.m. (CET) on Wednesday and Thursday, the Fed chair will answer questions from Democratic and Republican politicians in the Senate and House of Representatives. MEPs ask Powell about his perspective on the monetary authorities’ recent monetary and interest rate policy decisions. They expect solid justifications for the Fed’s actions over the past 12 months. The often critical remarks made by US politicians regarding inflation, banking problems, future economic risks in the US and other issues such as problems in the US housing sector and in lending to companies are being closely observed in the stock market. Market participants are hoping for further insights into the approach of the US central bankers in the coming trading months. As in the previous year, the financial market could react sensitively to unclear statements by Powell or a lack of monetary policy stringency in his answers. If, as a result, there are major price movements in the US dollar index (DXY) and the US stock market, the Bitcoin price and with it the entire crypto market should also react to this. Increased volatility must be planned for on both survey days.
More data from the US housing market
Thursday, June 22, 2023: At 4:00 p.m. (CET), the National Association of Realtors presents the latest sales figures for existing properties for the month of May. This data is considered an important indication of the state of the US real estate market. 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. In the last two months of trading, sales figures have been below expert forecasts twice in a row and have caused price consolidation on the US stock and crypto markets. Should the published figures top the estimate, which was again reduced to 4.24 million compared to the previous month, this should put further pressure on the US dollar. A sustained weakening of the US currency could have a positive effect on the prices of Bitcoin and Co. in an initial reaction. On the other hand, if the sales figures for existing properties point to continued weakness in the US housing market, which would not be surprising given the high interest rates on new bank loans, the US dollar could recover from its recent course correction and thus have a negative impact on the US stock market and the impact bitcoin price.
US purchasing managers’ indices for the service sector
Friday, June 23, 2023: The latest Purchasing Managers’ Indices (PMI) for the US services sector will be released in the end of the week at 3:45 p.m. (CET). Most recently, the final figures for the month of May, at 54.9, were again below the expert expectation of 54.1. Despite slight declines, the service sector is still stronger than the manufacturing industry in the USA. Only if the analyst estimate of 54.0 is missed significantly could investors take this as an opportunity to sell more stocks with a focus on services, which should weigh on the US stock market as a whole. If, contrary to expectations, the service sector weakens significantly, this would be a strong indication that the US economy could continue to cool down despite the recent positive signals from other sectors. However, the effects on the prices of Bitcoin and Co. are difficult to predict. As long as the Nasdaq does not also give way significantly, the key crypto currency could be largely unimpressed in view of the recent low correlation. Problems in the service sector should also further increase the likelihood of a further decline in inflation in the coming months. If, on the other hand, the service sector continues to be robust and the number forecast is exceeded, the US stock indices could continue their bullish previous weeks and also stabilize the crypto market for the time being.