Last week, Bitcoin and crypto prices capped off a month and quarter that could serve as a bullish harbinger for July. As the market continues to evolve and capture the attention of investors worldwide, it’s important to keep an eye on macroeconomic events that can significantly impact the price of Bitcoin and other cryptocurrencies.
This week, several key events are scheduled that could shape the market sentiment and influence the direction of the Bitcoin and crypto prices. Let’s take a closer look at what’s in store for the week ahead.
What’s Ahead For Bitcoin And crypto This Week
The week starts with the release of the ISM Manufacturing data on Monday, 10:00 am EST. This data provides insights into the performance of the manufacturing sector in the United States, which is a critical component of the overall economy.
A positive reading suggests a robust manufacturing sector, which typically leads to increased business investments and consumer spending. This, in turn, can bolster the traditional finance sector, as investors gain confidence in economic growth prospects. BTC and crypto could benefit as well.
On Tuesday, July 4, US markets will be closed due to Independence Day. With no major events scheduled, it’s likely to be a relatively quiet day in both traditional and crypto markets.
Wednesday, July 5 (2:00 pm EST), all eyes will be on the release of the Federal Open Market Committee (FOMC) Meeting Minutes. These minutes provide a detailed account of the discussions and decisions made during the last FOMC meeting. Investors will closely analyze the minutes for any indications of the Federal Reserve’s stance on monetary policy, interest rates, and inflation.
Any hints of potential changes in monetary policy can have a significant impact on both traditional markets and cryptocurrencies. For example, if the minutes suggest a more hawkish tone, indicating a potential tightening of monetary policy, it could lead to a sell-off for stocks, Bitcoin and crypto.
However, no negative surprises are likely. Jerome Powell already stated last week that two more rate hikes are likely to be needed this year to bring inflation down. Thus, the market is warned. The US central bank (Fed) has paused to assess the impact of the three major bank failures.
But to bring inflation down further, the Fed wants to see a weakening labor market (higher unemployment rates).
“Higher For Longer” If Labor Market Remains Strong
Remarkably, Thursday, July 6, brings a cluster of important reports related to the labor market and economic activity. The Services Purchasing Managers’ Index (PMI) data will be released, offering insights into the performance of the services sector.
Additionally, the Jobless Claims report will shed light on the number of individuals filing for unemployment benefits, providing a gauge of labor market health. Lower jobless claims indicate a strengthening labor market, which typically correlates with increased consumer spending and economic growth.
Usually, positive jobless claims data can lead to higher stock market performance and increased investor optimism in the traditional finance sector. However, it’s not that easy. The Fed’s long-standing belief is that a job market with strong hiring and increased wages typically fuels higher inflation. Therefore, they want to see higher unemployment rates. If the labor market remains strong, odds for another rate hike are increasing.
Another crucial report is the Job Openings and Labor Turnover Survey (JOLTS). This data provides insights into the labor market’s dynamism and provides a gauge of employers’ willingness to hire new employees. Higher job openings and increased hiring activity suggest a robust labor market and overall economic growth.
The most significant event of the week for both traditional markets and the crypto space could be the release of the June US Jobs Report, as it might be one of the most factors influencing the Fed’s next rate decision on July 26. This report includes data on nonfarm payrolls, unemployment rates, and wage growth.
For Bitcoin and crypto, any news around the BlackRock spot ETF are arguably the biggest influencers this week. While Fidelity, ARK and others already refiled their ETF applications after the US Securities and Exchange Commission deemed them “inadequate” last week, BlackRock has yet to refile or amend its application.
Many market participants believe that the world’s largest asset manager, through its close contacts with the regulator, knows something that everyone else does not. In this respect, the ETF buzz could once again have a major impact.
At press time, Bitcoin changed hands for $30,763, trading sideways in the range between $29,800 and $31,000.
Featured image from iStock, chart from TradingView.com