Bitcoin, a volatile crypto, is subject to several factors that influence its market value. Understanding the dynamics behind Bitcoin’s price movements is crucial for investors and enthusiasts alike.
This week, several elements are poised to impact Bitcoin prices, reflecting the crypto’s sensitivity to market dynamics and external influences. Exploring these factors sheds light on the complex nature of Bitcoin’s valuation and helps stakeholders navigate the ever-changing crypto landscape
Bitcoin remains at the mercy of traditional finance macroeconomic factors
At the time of writing, the value of Bitcoin (BTC) stands at $43,114.86, reflecting a 0.4% surge from one hour ago and a 0.5% surge since the last day. The present value of Bitcoin is 2.0% greater than its value from seven days ago. The aggregate traded volume of Bitcoin over the preceding twenty-four hours stands at $13,680,571,541.
The global crypto market cap value is $1.73 trillion, representing a change of 0.66% over the past twenty-four hours and 56.69% over the past year. The valuation of Bitcoin currently stands at $847 billion, signifying a market share of 48.82%.
Stablecoins, meanwhile, have a market capitalization of $137 billion, or 7.91% of the total crypto market capitalization. The Bitcoin Fear and Greed index is at a value of 60 as of today.
As volatile as the crypto market is, there are traditional and decentralized factors that affect the market. Here’s what to look up to this week. From the United States; The all-important ISM Non-Manufacturing PMI will be released on Monday, sparking investor interest.
A rise in service sector growth could diminish the likelihood of a March Fed rate cut. Recent US economic indicators, notably the US Jobs Report, left the probability of a Fed rate cut in March at 38% on Friday. However, investors must evaluate PMI sub-components such as pricing and employment.
On Tuesday, the RCM/TIPP Economic Optimism Index will be considered. A rise in economic mood may drive buyer demand for the US dollar.
On Thursday, the US labor market will be the focus of attention. Another increase in unemployment claims may increase the likelihood of a Fed rate drop in March.
In addition to the figures, investors should pay attention to FOMC members’ speeches. FOMC members Barkin (Wed/Thu), Bostic (Mon), Bowman (Wed), and Mester (Tues) are scheduled to speak. Views on the economic outlook, inflation, and the Fed’s rate policy would all affect the dial.
Market data from Europe
On Monday, trade data from Germany will kick off the week for the EUR/USD. A drop in exports would bolster mounting estimates of a first-quarter economic contraction. However, service sector PMIs for January must be considered later in the session. A higher revision to the preliminary PMI readings and the Italian PMI would move the dial.
The services sector, which accounts for more than 60% of the Eurozone economy, continues to be the primary driver of inflation. Aside from the figures, investors should analyze the price and employment sub-components.
German industry orders will be the focus on Tuesday, followed by industrial production data on Wednesday. Further losses in orders and output would suggest a recession in Q1.
Market Data from Asia
On Monday, finalized services PMI statistics for January will impact buyer demand for the Japanese yen. The services sector accounts for more than 60% of the Japanese economy. An upward revision to service sector activity could drive bets on the Bank of Japan’s switch from negative rates in H1 2024.
However, consumer spending figures for December deserve investor attention. A rise in household spending might fuel demand-driven inflation, forcing the Bank of Japan to depart zero interest rates.
Beyond the statistics, investors must monitor BoJ talk throughout the week. Views on a pivot from negative rates would shift the dial.
The Caixin Services PMI for January will be released on Monday, and investors will be interested. The service sector accounts for more than half of the Chinese economy. A surge in service sector activity might boost demand for riskier assets and trade-sensitive currencies, such as the Australian and New Zealand dollars.
However, investors must also examine the inflation figures released on Thursday. A smaller-than-expected drop in producer prices and a larger-than-expected increase in consumer prices would favor riskier assets. Producers modify their prices in response to the demand environment. Importantly, producer prices are a strong predictor of consumer price inflation.
