Bitrabo Editorial
This week is set to be action-packed in the crypto market with a series of macroeconomic events that will have a far-reaching impact beyond cryptocurrencies. Let’s examine these significant events and understand why they are important for crypto enthusiasts and investors alike.
The Macro Economic Calendar and Its Effects on Cryptocurrencies
Throughout the week, we can expect several macro events that will impact the crypto market, including the unsealing of the “Hinman documents,” inflation metrics, and a Fed rate decision, among others. The release of the said documents could affect not only the outcome of the Ripple v. SEC case but also the status of cryptocurrencies as securities.
The regulatory front for the week begins with the Hinman documents’ release, which could significantly impact the Ripple court case’s outcome. The SEC will also respond to Coinbase’s request for more transparent regulatory rules.
The week’s macro leg begins with the release of CPI numbers for May, a crucial inflation metric that indicates the average price change for consumer goods and services. If the CPI surpasses expectations, it can suggest a rise in inflation, leading to speculation about interest rate hikes. These potential hikes could strengthen the US dollar, causing a decline in Bitcoin and other cryptocurrencies as investors flee to the safety of the dollar.
The next day, PPI numbers for May will be released. PPI calculates the average selling price change for domestic producers, with higher-than-expected figures implying increased inflation at the production level that could translate to higher consumer prices. Like with the CPI, a stronger US dollar may trigger a reduction in cryptocurrency values.
The crypto market forewarns of an impending volatility rush | TOTAL at TradingView.com
Wednesday marks the Federal Reserve interest rate decision, where an increase in rates to curb inflation can cause the stock market to drop, leading to lower crypto prices, as investors steer clear of higher risk investments. Although experts anticipate a pause in rate hikes, crypto investments may rise in tandem with stocks – something that is conditional on the inflation figures’ cooperation.
Macro reports will continue to be released on Thursday, including Initial Jobless Claims, Retail Sales, Industrial Production, and Business Inventories. These metrics paint a detailed picture of economic health, with high jobless claims signalling a weak economy, leading to a flight to safety with the US dollar and a sell-off in riskier assets like crypto. Strong retail sales and industrial production imply economic strength, increasing risk appetite that could boost crypto prices substantially.
Fed Governor Waller will finally deliver a speech on Friday, giving us insights into the Fed’s future monetary policies. Depending on the tone and content of the speech, crypto markets could experience significant volatility.
Finally, these events lead into the US legacy markets’ holiday weekend, marking Juneteenth, which traditionally sees lower trade activities that could lead to increased volatility due to lower liquidity.