5 Key Events to Watch This Week | Airdrop Alert Pro

This week is filled with major economic events that could have a major impact on the cryptocurrency market. The macroeconomic data comes as market participants prepare for the year-end holiday season.

Meanwhile, Bitcoin (BTC) continues to hold above the $100,000 mark, with traders and investors anticipating further gains from the Christmas rally.

U.S. macroeconomic data this week that could impact Bitcoin sentiment

Cryptocurrency market participants, traders, and investors alike will be watching the following U.S. economic data this week for price implications.

S&P Flash Services and Manufacturing PMI data

The week begins with a preview of the S&P Services and Manufacturing Purchasing Managers Index (PMI) released on Monday. PMI data, derived from monthly business surveys, are a key indicator of the health of the economy and are often used to predict market trends and assess business conditions.

The services PMI was 56.1 in November, and the consensus forecast for December was slightly lower at 55.3. At the same time, the manufacturing PMI was 49.7 in November and is expected to decline slightly to 49.6 in December. A PMI above 50 indicates economic expansion, while a PMI below 50 indicates contraction.

If the data shows strength in services and manufacturing, it could boost overall economic sentiment. This optimism may increase investor interest in riskier assets, including cryptocurrencies. However, economists remained cautious as concerns about the broader economic outlook persisted.

“The U.S. economy is in complete disarray right now. We have an inversion in yields curve The ISM manufacturing PMI has been below 50 for nearly a year. The inversion of the yield curve has successfully predicted the past seven recessions. Before COVID-19 and the 2008 crash, the ISM manufacturing PMI was below 50,” a popular user on X shared.

retail sales data

Another U.S. economic data of interest to cryptocurrency market participants this week is retail sales data. Economists forecast a reading of 0.6% in November, following October’s 0.4% reading. Retail sales data will provide insights into consumer spending patterns and overall consumer confidence.

If retail sales are strong, indicating increased consumer spending, it could be viewed as a positive sign for the economy. This may increase investor confidence in traditional financial markets, which may also spread to the cryptocurrency market.

Retail sales data will also affect inflation expect. If retail sales are strong, it could indicate increased demand and could be higher inflation offline. Cryptocurrencies like Bitcoin are often viewed as a hedge against inflation, so any sign of rising inflation could prompt investors to move toward cryptocurrencies.

“Strong sales = bull market, weak = risk aversion,” popular analyst Mark Cullen explain.

Federal Reserve Interest Rate Decision (FOMC)

However, the highlight of this week’s U.S. macroeconomic data will be Federal Reserve (Fed) interest rate decision Wednesday. Cryptocurrency markets are bracing for market volatility amid expectations of whether the Federal Reserve will raise or cut interest rates.

According to the CME FedWatch tool, the market expects a 25 basis points (0.25% bps) rate cut on Wednesday. In comparison, the probability of the Fed cutting interest rates by 50 basis points (0.5%) is 6.6%.

That signals expectations that the Fed will take a more cautious stance on cutting interest rates next year amid signs that progress toward lowering inflation to its 2 percent target has stalled. Against this backdrop, investors will also look to the Fed’s dot plot to gauge whether the median rate forecast signals a hawkish shift in the Fed’s outlook.

Federal Reserve Chairman Jerome Powell will hold a press conference shortly after the Federal Open Market Committee (FOMC) meeting, which is another interesting observation for cryptocurrency market participants.

“Markets are watching closely for any signs of tightening or dovish comments ahead. A surprise here could trigger major moves across the board, especially in rate-sensitive sectors,” one popular user on X (Twitter) commented.

U.S. Consumer Price Index (consumer price index) and the producer price index (PPI) released last week reinforced expectations that the Fed will slow the pace of its rate-cutting cycle next year. Specifically, CPI is rising again, while core CPI refuses to fall. At the same time, unemployment is gradually rising.

Given this situation, the Fed may continue to cut interest rates by another 0.25%. However, this stance may be based on the hope that this is only a temporary situation and that inflation and unemployment will continue to fall in the period ahead.

GDP data for the third quarter of 2024

On Thursday, the U.S. Bureau of Economic Analysis (BEA) will release its second revised third-quarter (Q3) GDP data. As we approach the end of the year, these data will provide us with insights into the health of the economy.

Notably, one of the leading indicators of the health of the U.S. economy, the median forecast was 2.9%, compared with 2.8% previously. This means that the annual growth rate of U.S. GDP in the third quarter of 2024 will be 2.8%, and the market will pay attention to whether this trend continues.

PCE inflation data

The week will end with the release of personal consumption expenditures (PCE) inflation data for November on Friday. It is a measure of consumer spending, including all goods and services purchased by U.S. households. This makes it a key initiative for the Fed, meaning any surprises could have a direct impact on future Fed policy decisions and market sentiment.

according to Kobe XixinA popular comment in global capital markets, one-month core PCE inflation is currently above 3.5% as traders await November data this weekend. Meanwhile, one-month, three-month and six-month annualized core personal consumption expenditures inflation rates have all picked up again.

Likewise, the one-month annualized inflation rate for supercore PCE is currently close to 5%. On the other hand, headline super core PCE inflation is above 3.5% and is picking up. Taken together, these data suggest that consumers are facing renewed inflationary pressures across many categories.

Based on the above, this week could be crazy, and it could intensify volatility around these events. At the time of writing, BTC is trading at $104,991It has edged up 2% since Monday’s open.