The bitcoin market is gearing up for a crucial week filled with macroeconomic developments that could significantly shape its trajectory. This week’s events are set to provide critical data that could influence U.S. monetary policy decisions and, by extension, bitcoin’s price movements.
#1 bitcoin awaits FOMC minutes release: August 21, 2024
On Wednesday, the Federal Open Market Committee (FOMC) will release the minutes of its July meeting at 2:00 p.m. Eastern Standard Time. During this meeting, the FOMC kept the federal funds rate stable between 5.25% and 5.50%. This decision met market expectations, which had already priced in the current rate based on prevailing economic conditions. However, the upcoming minutes are expected to provide more detailed information on the Fed's views on inflation, economic growth, and future monetary policy.
Federal Reserve Chairman Jerome Powell previously indicated that the Fed could consider rate cuts if inflation pressures continue to ease. Investors and analysts will be scanning the minutes for any hint of this shift, especially subtle changes in language about economic risks or the inflation outlook.
Matthew Dixon, CEO of Evai, x.com/mdtrade/status/1825476516383171039″ target=”_blank” rel=”noopener nofollow”>commented On x: “btc appears to be in the midst of a minor correction in both the larger fractal triangle and the smaller wave 2 that is currently underway. The wave (in blue) may have to go a bit lower (probably) before we get a powerful bullish breakout. Wednesday’s FOMC minutes or Chairman Powell on Friday may provide the stimulus.”
#2 Nonfarm Payrolls Data Review: August 21, 2024
On the same day, the U.S. Bureau of Labor Statistics will revise nonfarm payrolls data for July 2024. Goldman Sachs analysts project a substantial downward revision to these figures, potentially reducing between 600,000 and 1,000,000 jobs. This potential downward adjustment is based on a reference to the Quarterly Census of Employment and Wages (QCEW), which could exclude up to 500,000 previously counted unauthorized workers.
This review is critical because it could dramatically alter market expectations regarding the strength of the U.S. labor market and subsequently influence the Federal Reserve's rate decisions. A weaker labor market would typically lead to higher expectations of rate cuts as the Fed may try to stimulate economic activity.
Cryptocurrency analyst Bera (@doomsdart) x.com/doomsdart/status/1825201617576030690″ target=”_blank” rel=”noopener nofollow”>described The implications: “Rate cut expectations, which were hovering around -2% for the next 12 months, are going to rise again violently, with further cuts coming this year and even more by August 2025. This will cause the markets to suffer another red earthquake, and this time it is not known how much lower we will go.”
#3 Federal Reserve Chairman Jerome Powell's speech in Jackson Hole – August 25, 2024
The week’s events will culminate with Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole Economic Symposium on Friday at 10:00 a.m. ET. This speech is highly anticipated as it could confirm the Fed’s near-term direction regarding interest rates.
Global markets, including bitcoin, are sensitive to Powell's comments because they directly influence expectations about the fiscal environment of the US economy. If Powell signals more aggressive rate cuts, it could signal increased liquidity and weaken the dollar, triggering a major bullish trend for financial markets and bitcoin.
Mohamed A. El-Erian, President of Queens' College and Chief Economic Advisor to Allianz, x.com/elerianm/status/1825255213990887613″ target=”_blank” rel=”noopener nofollow”>fixed via x: “The big focus this week for the global economy and markets will be on the Jackson Hole conference, particularly Federal Reserve Chairman Jerome Powell’s session on Friday morning.”
At the time of writing, bitcoin was trading at $58,111.
Featured image created with DALL.E, chart from TradingView.com
