These crypto headlines matter for Bitcoin and crypto this week
Crypto investors should keep these economic and financial data points on their radar during this trading week.
Investors in the crypto space should keep these economic and financial figures in this trading week close watch.
Investors are looking back on a bearish trading week. In contrast to expectations, the US Consumer Price Index (CPI) rose from 8.1% to 8.3%, after it had recently fallen in the prior months. Market participants read this as proof that inflation isn’t easing anytime soon. As a result, investors dumped stocks and crypto holdings en masse, which ended in a Black Tuesday.
The US tech index Nasdaq-100 fell nearly six percentage points, the steepest drop since March 2020. Tech blue chips like Apple and Amazon weren’t spared either, slipping about 6 to 8 percentage points. Also, the prices of so-called safe-haven asset classes like US Treasuries, gold, and defensive pharmaceutical stocks were punished. Meanwhile, the US dollar index DXY rose to a new year-to-date high. The broad sell-off also dragged crypto prices lower.
Even the successful switch of Ethereum from Proof of Work to Proof of Stake last Thursday couldn’t turn the weekly downtrend positive. Despite the merger, investors pulled back from Ether amid high US inflation. That caused the price of the second-largest cryptocurrency to fall by 12%. During the week, it dropped as much as 19%.
On top of ongoing negative economic news, traders faced days ahead of a big expiration date late in the week, bringing volatile moves in the US stock markets. The triple expiration of bets on indices, commodities, and currencies, the so-called triple witching, produced a bearish end to the week in traditional markets and dragged the crypto market along.
Building permits in the US on Tuesday
Tomorrow, Tuesday, September 20, at 2:30 p.m. CET, the Census Bureau will publish the August building permits for the US for the first time. As in the previous month, a rise in building permits could spark a rally in the US stock market. Experts are forecasting 1.610 million. Analysts have again lowered their expectations. In July, 1.685 million building permits were issued. Building permits are considered an early indicator for the US housing market.
If permits beat expectations again, it would signal that the US housing market remains resilient. A persistently strong housing sector, however, could prompt the Federal Reserve to stay the course with rate hikes and tighten monetary policy further, as Fed Chair Powell indicated the week prior. It’s hard to predict whether strong housing data will have a positive effect on stock and crypto prices, as recently happened. Statistically, strong housing data tends to support the dollar and thus weigh on Bitcoin and peers.
Midweek existing-home sales data
The trading day on Wednesday, September 21, starts at 4:00 p.m. CET with August existing-home sales data. The figures, published monthly by the US National Association of Realtors, reflect current consumer appetite. Stronger-than-expected sales point to rising consumer spending in the US. If existing-home sales continue to fall as in the previous month and come in under the market analysts’ expected 4.70 million homes, the negative trend of persistent consumer caution could deepen. Weak sales typically have a negative effect on the strength of the US dollar, which in this scenario could be positive for crypto prices.
