Bitcoin (BTC) and with it the majority of altcoins can look back on a bullish week of trading. The crypto market thus followed the ongoing recovery on the US stock markets, which continued their recovery rally of the previous weeks as a result of better than expected figures and falling US producer prices. The bulls seem to be back in the market for the short term and used better than forecast Netflix numbers as an opportunity to close the friendly trading week with a significant price increase.
Shortly after the close of trading last Friday, bullish sentiment spilled over into the crypto market again, sending Bitcoin to its highest price in five months of trading. At USD 23,381, the Bitcoin price rose to the breaking point before the sell-off on August 19 of the previous year and has thus increased in value by around 43 percent within three trading weeks. The total market capitalization also increased significantly and was listed at just under 1.1 trillion US dollars at the beginning of the week.
The earnings season in the US is picking up speed
In the new trading week, investors are increasingly looking at the quarterly figures of large US technology companies. With the software giant Microsoft on Tuesday, the largest manufacturer of electric cars Tesla on Wednesday and the chip manufacturer Intel on Thursday, the first large Nasdaq companies will open their books. In addition, market participants are likely to take a close look at the quarterly reports from the credit card companies Mastercard and Visa in the second half of the week in order to be able to assess the consumer mood of private households worldwide.
Market participants are focusing on the following economic data
With a view to the economic data, the trading week only really gets going on Wednesday. In the middle of the week, investors expect the published Ifo business climate index in Germany to give them an insight into the economic situation in the largest industrial nation in the euro area, so that they can draw conclusions about the state of Europe. Durable goods orders and US gross domestic product will follow in the second half of the week. The trading week will be rounded off by the latest data from the core rate of the PCE price index of private consumption spending in the USA.
Numbers from Germany in the middle of the week
Wednesday, January 25, 2023: At 10:00 a.m. (CET), the Ifo Institute will publish the latest figures on the business climate in January. A slight improvement from 88.6 in December to 90.2 points is expected. The business climate had already stabilized in the last three months. If the analysts’ expectations are met or even exceeded, the share indices in the euro zone should benefit. A friendly mood among investors could also have a positive effect on the crypto market as a result. On the other hand, if the forecasts are clearly missed, this should lead to a weakness of the common currency, the euro, and thus strengthen the US dollar. Which in turn could have a negative impact on assets traded against the world’s leading currency.
US new orders and home sales in focus
Thursday, January 26, 2023: At 2:30 p.m. (CET), the latest orders for durable goods will be presented. These incoming orders reflect the demand for industrial goods for the past month of December. Market observers expect a significant increase of 4.5 percentage points. After a decline to -2.1 percent, the experts expect a significant boost in demand to +2.6 percentage points. If the figures match the forecasts or if the incoming orders at least increase significantly compared to the previous month, this usually leads to a rising exchange rate of the US dollar on the foreign exchange markets. This should have a negative impact on Bitcoin and Co. If, on the other hand, incoming orders are weak again, the US dollar rate should trend further south and could therefore have a positive effect on prices on the crypto market.
At 16:00 (CET) updated sales figures for new homes in the USA will be presented. House sales are considered a good indicator of the current level of consumer spending. If home sales are weaker than the 614,000 single-family homes forecast by the experts, this would point to a renewed deterioration in consumer spending. In the previous month, the number of houses sold was 640,000. Should the weakness in the real estate market increase again after stabilizing in the previous months, the value of the US dollar would also continue to fall, which should have a positive effect on the Bitcoin price.
US core PCE rate to close the week
Friday, January 27, 2023: At 2:30 p.m. (CET), the core inflation rate (PCE) for the USA in December will be presented. An increase of 0.3 percent compared to the previous month is forecast. If the core rate of private consumer spending exceeds the market experts’ expectations, this would be an important indication that the US Federal Reserve is likely to raise the key interest rate again at its next interest rate meeting on February 1st. If, contrary to expectations, the PCE core rate falls as it did at the beginning of December and falls below the forecasts, this could lead to a sigh of relief on the stock exchanges and boost share and crypto prices, as a pause in the key interest rate adjustment could become more likely.