There are events every week that have the potential to cause a stir in the cryptocurrency market. Similar to the beginning of the weekly cycle, investors are already uneasy about several critical economic data. The US retail sales data and the impending Fed interest rate decision are the two main topics of interest for traders this week. These factors may be quite important in determining how volatile Bitcoin and cryptocurrencies are overall.
This week, investors and cryptocurrency traders are waiting impatiently for a number of significant US economic figures. These fresh findings will probably have an impact on the course of Bitcoin (BTC), which is presently trading between $57,000 and $60,000. In addition to these three crucial indications.
The Fed's interest rate decision, retail sales data, and jobless claims are all causing significant tremors in the cryptocurrency market.
The US economy's state will be determined in large part by the retail sales data that is expected on Tuesday. In contrast to the 0.2% fall in June, everyone was taken aback by an unexpected 1% growth in July. A strong rebound in spending would be indicated by a continued increase, which may raise the price of riskier assets like cryptocurrencies.
Conversely, a low figure would rekindle concerns about a recession and stifle investors' excitement for Bitcoin and similar ventures. What traders are keeping a careful eye on is this:
The focus will be on the Fed's much awaited interest rate announcement on Wednesday. Although inflation has somewhat decreased, a cut is anticipated, but how much will it be? The tension is building: although a more mild 25 basis point drop would be viewed as more "predictable," a 50 basis point cut, which would pose an immediate threat to bitcoin, may surprise markets and cause further volatility.
The move could have a significant impact on Bitcoin (BTC), which has increased by around 7% in the last week.
The market is getting ready to respond since it is always reactive to Fed statements. While some analysts, like as JPMorgan, are calling for a sharp collapse, others are still cautious.
Mati Greenspan, the CEO of Quantum Economics, stated that "a 0.25% decline would be seen as a positive signal for risk assets like crypto."
The final important metric to monitor is US unemployment claims. The labour market may be slowing down, but unemployment rates are still rather low—they were at 4.2% in August. Investor opinion may shift in response to a large decline, which would affect market sentiment.
Still-strong employment markets, however, may contribute to a soft landing scenario—one in which the economy decelerates gently and with minimal disruption. Then, there would be less chance of an instantaneous recession and a more favourable atmosphere for Bitcoin and other crypto assets.
Bitcoin and volatility are two concepts that go hand in hand. It is essential to keep a close eye on market movements and economic considerations in order to navigate these turbulent waters.