Biggest Week For Bitcoin And Crypto In 2023 Ahead
The Bitcoin and cryptocurrency market is poised to be the biggest week of 2023 so far. While all eyes are on Wednesday’s Federal Open Market Committee (FOMC) meeting, this week is once again filled with crucial macroeconomic data. Add to that the still unresolved situation regarding First Republic Bank.
Also, Bitcoin price is back at a crucial time. After BTC surged to $29,975 on Sunday, the bears unleashed another attack just before the end of the month, pushing BTC to $28,500. Still, they failed to stop the fourth consecutive green monthly candle.
Major Events for Bitcoin and Cryptocurrency This Week
On Tuesday, May 2nd at 10:00 am EST (4:00 pm CET), the US Bureau of Labor Statistics will release the JOLT Job Openings report. In March, the number of open positions dropped below 10 million for the first time since May 2021. As of April 4, 9.93 million jobs were available.
Forecasts point to the offer of 9.683 million jobs in April, indicating a new slowdown in the American labor market. If the jobs data turns out better than expected as the US economy proves to be resilient, we can expect US stock prices to continue to perform well. Likewise, the cryptocurrency market is likely to benefit from good labor market data.
On Wednesday, May 3, 2023, at 14:00 EST (20:00 CET), the focus will be on the US Federal Reserve (Fed) interest rate decision. According to the latest data from the CME FedWatch tool, 84.5% expect another 25 basis point increase to 5.25%.
However, it is likely that this decision has already been priced in. What will be most important is the FOMC press conference at 2:30 pm EST, when Fed Chairman Jerome Powell will deliver his comments for the coming months. During the press conference, volatility is expected to increase in the Bitcoin and crypto markets.
The market is waiting for a comment from Powell that this was the last rate hike and that there will be the first rate cuts later this year. However, the latter seems very unlikely, especially since Powell philosophized about two more rate hikes and continued tight monetary policy this year in a conversation with a fake Volodymyr Zelenskyy. It will also be interesting to see how Fed Chairman Powell responds to the FDIC’s emergency intervention in First Republic Bank.
Powell remains under pressure due to ongoing problems in the US banking sector and the credit crunch that continues to worsen. Goldman Sachs, therefore, believe:
We expect the FOMC to signal it anticipates a pause in June, but maintains a hawkish bias, stopping earlier than initially anticipated because the banking stress is likely to cause a tightening of credit.
On Friday, May 5, 2023, the focus will once again be on the US job market. At 8:15 am EST (2:15 pm CET), the Bureau of Labor Statistics will release its Non-Farm Payrolls (NFP) employment figures for April. More recently, the numbers have deteriorated slightly.
The forecast of 180,000 new jobs created for April is well below the average of recent months for trade. By the beginning of the year, 517,000 new jobs had been created. Confirmation of this forecast would make the risk of recession in the United States in the coming months more likely, with a corresponding negative reaction in financial markets likely. On the other hand, a positive surprise can be a catalyst for a recovery in the crypto market.
Also at 8:30 am EST, the US Unemployment Rate for April will be announced. The estimate is 3.6%. In March, the unemployment rate had dropped from 3.6% to 3.5%. Fed Chairman Powell has repeatedly stressed that a possible US recession could also push the unemployment rate to 4.5%. An unchanged unemployment rate should therefore be seen positively by the market.
Other events this week
Positive momentum, like last week, could also come from the stock market this week. 25% of S&P 500 companies report earnings. After strong quarterly numbers from internet giants Microsoft, Alphabet and Amazon, the US stock market ended the last week of trading higher.
The crisis of the First Republic can also be significant. As Bitcoinist reported, the next domino in the banking system could be a catalyst for Bitcoin. According to reports from various sources, the sale of First Republic Bank has already taken place. Two of the most promising bidders are JP Morgan and Bank of America.
At press time, Bitcoin price was trading at $28,600.
Featured Image from iStock, chart from TradingView.com