This week, several key US economic reports could influence the direction of crypto markets, which remain highly sensitive to broader macroeconomic trends.
Bitcoin is currently hovering around $95,000, with upcoming economic data expected to determine its next big price move.
On Tuesday, the University of Michigan will release its consumer confidence index, which is expected to drop slightly from 104.1 to 102.4. While consumer confidence doesn’t typically move crypto markets as much as events like the Fed raising interest rates, it does reflect sentiment around spending and investment, which could affect Bitcoin.
Thursday’s jobless claims data, reflecting new filings, offers a snapshot of the labor market. A rise in the number of claims signals economic weakness, which often causes investors to shy away from riskier assets like Bitcoin. Conversely, a drop can indicate a strong job market, which boosts confidence in riskier investments like cryptocurrencies.
The GDP report, which is also due on Thursday, could affect BTC’s appeal. Stronger-than-expected GDP (above the projected 2.3% for Q4 2024) could drive investors towards equities, anticipating tighter Federal Reserve policies. A weaker GDP could heighten recession fears and boost Bitcoin as a store of value.
Friday’s personal consumption expenditures (PCE) report, a key inflation gauge for the Fed, could impact the price of the leading digital asset. A higher-than-expected PCE could dampen hopes of a rate cut, leading to a drop in the price of Bitcoin. A lower PCE could spark optimism for interest rate cuts, potentially boosting the price of the cryptocurrency.
Bitcoin remains sensitive to macroeconomic trends and investors should be prepared for potential volatility this week.
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Bitcoin-focused investment firm Strategy Inc. (formerly MicroStrategy) is facing mounting legal pressure as at least five law firms have filed class-action lawsuits over the company’s $6 billion in unrealized Bitcoin losses.
Digital banking platform SoFi Technologies is making a strong return to the cryptocurrency space, relaunching its crypto trading and blockchain services after stepping away from the sector in late 2023.
Digital assets are gaining ground in corporate finance strategies, as more publicly traded companies embrace cryptocurrencies for treasury diversification.