Crypto markets brace for volatile days ahead, with key US economic data due for release this week, starting Tuesday. These macroeconomic events could affect the portfolios of Bitcoin (BTC) holders, making it imperative for investors to adjust their trading strategies.
Economic developments are progressively influencing Bitcoin market sentiment, increasing the likelihood of volatility this week.
US Economic Data With Crypto Implications This Week
The following macroeconomic data points could influence Bitcoin sentiment this week.
JOLTS
Starting the list of US economic data with crypto implications this week is the release of US job openings data on Tuesday, March 11. Commonly referred to as the Job Openings and Labor Turnover Survey (JOLTS), this data point could significantly sway Bitcoin sentiment by providing insights into the health of the labor market and broader economy.
If the data indicates a strong labor market with high job openings—say, exceeding the previous 7.6 million mark—it might signal persistent economic strength. This could reduce expectations for imminent Federal Reserve (Fed) rate cuts.
Historically, a strong labor market can bolster the US dollar and traditional assets like stocks, drawing investors away from riskier assets like Bitcoin. This could dampen Bitcoin sentiment, as investors might perceive less need for a decentralized hedge against monetary easing.
Conversely, if job openings come in lower than anticipated, it could heighten recession fears or signal a cooling economy. Such an outcome would prompt speculation of Fed intervention through rate cuts. This scenario often boosts Bitcoin’s appeal as a “digital gold” or haven, potentially driving positive sentiment and price momentum among crypto enthusiasts.
CPI
The US CPI (Consumer Price Index) data, set for release on Wednesday, March 12, could also sway Bitcoin sentiment. This data will signal inflation trends that influence Fed policy.
A higher-than-expected CPI forecasted at 2.9% compared to the previous 3.0% might suggest persistent inflation. This would reduce hopes for rate cuts and strengthen the dollar, dampening Bitcoin’s appeal as a hedge. Such an outcome could lower sentiment and prices as investors favor traditional assets.
On the other hand, a softer CPI could fuel expectations of looser monetary policy, weakening the dollar and boosting Bitcoin as a risk asset. This would lift sentiment among crypto traders.
“CPI report on Wednesday – Core Inflation number going to come in cool – potentially lower than most expect. BTC will pump,” one user on X stated.
Initial Jobless Claims
The US Initial Jobless Claims data, due Thursday, March 13, could also sway Bitcoin sentiment by reflecting labor market strength or weakness.
If claims drop below the expected 220,000 (following last week’s 221,000), it might signal a strong economy. This could strengthen the dollar and shift investors’ focus to traditional assets like stocks. Such an outcome would dampen Bitcoin’s appeal as a risk asset, lowering sentiment.
Meanwhile, higher-than-expected claims might indicate economic softening, raising hopes for Fed rate cuts. This often boosts Bitcoin as a hedge against fiat weakness, lifting sentiment and prices.
PPI
The US PPI (Producer Price Index) data, scheduled for release on Thursday, March 13, could impact Bitcoin sentiment by revealing wholesale inflation trends.
A higher-than-expected PPI, forecasted at 0.3% month-over-month, might indicate rising producer costs, potentially signaling persistent inflation. This could reduce expectations for Fed rate cuts, strengthening the dollar and pressuring Bitcoin as a risk asset, thus dampening sentiment.
However, a lower PPI could ease inflation fears, boost rate-cut hopes, and enhance Bitcoin’s appeal as an inflation hedge, lifting sentiment.
“A huge week for economic data, with JOLTS, CPI & PPI. We could either see some strength and markets claw back some of the losses of the last couple of weeks, or confirmation there are underlying issues and markets continue to sell off,” market analyst Mark Cullen indicated.
Consumer Sentiment
The US Consumer Sentiment Index, due for release on Friday from the University of Michigan, could significantly influence Bitcoin sentiment by reflecting public confidence in the economy.
A strong reading, potentially above the anticipated 64.0 (based on recent trends), might suggest optimism about economic stability, bolstering traditional markets and the dollar. This could dampen Bitcoin’s allure as a hedge against uncertainty, leading to bearish sentiment among crypto investors, as funds might flow toward equities.
Conversely, a weaker-than-expected figure could signal economic unease, enhancing Bitcoin’s appeal as a decentralized asset amid fears of inflation or recession. This would boost bullish sentiment and potentially its price. Given Bitcoin’s sensitivity to macroeconomic cues, this data could sway trader perceptions sharply.
“The University of Michigan’s consumer sentiment survey can tell us how optimistic people feel about the economy. This can impact consumer spending, which is a major driver of economic growth,” Pennybois Trades Alert highlighted in a post.
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