Information about the SEC and rumors about Operation Choke Point might be relegated to the background. There will be a pivotal week for the Bitcoin and cryptocurrency markets once again. Bitcoin’s price is currently consolidating after hitting an all-time high of $24,248 on February 2.
Last week, the cryptocurrency market fell due to reports of crackdowns by Kraken, the SEC, and central US exchanges on staking cryptocurrency. In addition to this, the crypto market is being weighed down by contradictory statements from various members of the U.S. Federal Reserve.
U.S. inflation rates from recent months were revised backward by the Bureau of Labor Statistics on Friday, sparking concerns about “sticky” inflation and raising the prospect of higher rates for a longer period of time.
The highlight of this trading week will occur on Tuesday. The January inflation report for the United States will be released by the Bureau of Labor Statistics at 8:30 a.m. EST. The consumer price index decreased to 6.5% in December from 7.1% in November.
There has been a shift in expectations for January, and now 6.2% is the new low estimate. The ongoing rally in stock prices and in the cryptocurrency market since the beginning of the year may continue if the analysts’ predictions are met or surpassed.
However, if the CPI exceeds expectations, the U.S. Dollar Index (DXY) is likely to keep rising, putting more pressure on risk assets like crypto and bitcoin due to their inverse correlation. The potential for harm from this should not be minimized.
Due to seasonal adjustments, the numbers for the prior three months were revised upward last Friday, February 10. This might be a red flag that the US inflation rate is more “sticky” than investors currently account for.
The value of the Dollar Index (DXY) has reached an intriguing inflection point. After DXY held its multi-year support at 101, the index is now at 103.7, close to resistance at 103.9.
The crypto market could be in for more trouble if prices close each day above this level. The DXY may have more room to run with the daily RSI at 56. In light of this, this week’s DXY analysis is as crucial as ever.
In the United States, January’s retail sales data will be released on Wednesday, February 15 at 8:30 a.m. EST. They play a crucial role in gauging the mood of consumers at home.
There was a decline in retail sales in the United States in the months of November and December of 2022. The December figure of -1.1% was even further below the analysts’ estimate of -0.8%, which was already quite low. However, analysts anticipate a rebound to 1.6% for the month of January.
After yesterday’s CPI data release, the stock market and bitcoin market could use another bullish impulse if consumer confidence in the United States improves.
The release of the January U.S. Producer Price Index (PPI) is scheduled for 8:30 a.m. EST on Thursday, February 16. Speculators anticipate a 0.4% rise from the previous month. Producer prices fell by 0.5% in December, which was more than many economists expected.
If the PPI goes up as forecast, it will be bad news for the stock and cryptocurrency markets because a stronger dollar will be one of the main drivers of those markets.
However, if the PPI comes in lower than expected, it will relieve the pressure on Bitcoin and may cause a bullish price reaction in the cryptocurrency market.