The upcoming week in 2023 could be the most significant for the Bitcoin and cryptocurrency market yet. Although Wednesday’s Federal Open Market Committee (FOMC) meeting is the centre of attention, several crucial macro data releases are scheduled this week. The unresolved issue regarding First Republic Bank adds to the mix of important events.
Moreover, the Bitcoin value has reached a crucial point. Initially, Bitcoin rose to $29,975 on Sunday; however, the bears launched another attack towards the end of the month, causing the value to drop to around $28,500. Despite this setback, they were unsuccessful in preventing the fourth monthly increase in a row, represented by a green candle on the chart.
Bitcoin And Crypto Following Key Events Fuel Market And Investor Interest
The US Bureau of Labour Statistics will release the JOLT Job Openings report on Tuesday, May 2, at 10:00 a.m. EST (4:00 p.m. CET). For the first time since May 2021, job vacancies dipped below 10 million in March. 9.93 million open jobs were recorded as of April 04, 2004.
According to forecasts, 9.683 million jobs were available in April, signalling a further decline in the United States labour market. If the jobs data comes in better than predicted and the US economy shows to be resilient, US equity prices should continue to rise. Similarly, favourable labour market statistics are likely to support the crypto market.
The attention will be on the US Federal Reserve (Fed) interest rate decision on Wednesday, May 3, 2023, at 2:00 pm EST (8:00 pm CET). According to the most recent CME FedWatch statistics, 84.5% foresee another 25 basis point rate hike to 5.25%.
The effects of this decision have probably already been reflected in the market. The more important event will be the FOMC press conference at 2:30 pm EST, during which Fed Chairman Jerome Powell will discuss his plans. It is anticipated that the Bitcoin and crypto markets will experience a significant volatility increase due to the press conference.
The market will look for Powell to say that this is the last rate hike and that the first-rate decreases will occur later this year. However, the latter appears highly unlikely, especially given Powell’s recent musings on two more rate hikes and continued tight monetary policy with a phoney Volodymyr Zelenskyy. It will also be fascinating to see how Federal Reserve Chairman Powell reacts to the FDIC’s emergency intervention at First Republic Bank.
Powell is under pressure because of the persistent issues in the US banking industry and the worsening credit crunch. Goldman Sachs wrote:
We expect the FOMC to signal that it anticipates pausing in June but retains a hawkish bias, stopping earlier than it initially envisioned because bank stress is likely to cause a tightening of credit.
On Friday, May 5, 2023, the spotlight will return to the United States labour market. The Bureau of Labour Statistics will release nonfarm payrolls (NFP) employment numbers for April at 8:15 a.m. EST (2:15 p.m. CET). The figures have recently deteriorated slightly.
The projected figure for new job openings in April is 180,000, below the average. If the forecast is correct, it may result in a negative response from financial markets, indicating a potential recession in the United States. If the actual number exceeds estimates, it could trigger a surge in the cryptocurrency market.
Also, at 8:30 a.m. EST, the April unemployment rate in the United States will be released. 3.6% is the estimate. The unemployment rate fell from 3.6% to 3.5% in March. Fed Chairman Powell has repeatedly stated that a hypothetical US recession might push the unemployment rate to 4.5%. The market should consequently see an unchanged unemployment rate favourably.
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