Recovery in the cryptocurrency sector stalled in the last week of trading.
The Bitcoin price reached a new high for the year at $31,525, and Ethereum (ETH) was also able to continue its rally with a rise to $1,978. Overall, the crypto market moved sideways, following the US S&P500 and Nasdaq100 stock indices, which had to give back their gains after a strong first half of the week on inconsistent labor market data.
Renewed deadlock over SEC approval of early spot ETF applications may have acted as a drag on Bitcoin and Co. price developments. Although the key cryptocurrency was able to stabilize again above the psychological mark of $30,000 in the prior week, the buyer side has yet to get out on a sustainable basis.
This trading week will open with new economic data from the People’s Republic of China. With the release of quarterly figures from major US banks JP Morgan and Citigroup, the new reporting season for the second quarter of trading is slowly picking up speed.
Chinese Consumer and Producer Prices
Today at 03:30 (CET) the People’s Republic publishes the new inflation data for the month of June. In a monthly comparison, negative consumer prices are expected to rise slightly from -0.2 percent to 0.0 percent.
If consumer prices in China fall short of forecasts, as they have in the past four months of trading, China’s central bank PBOC is likely to continue its loose monetary policy to stimulate the economy. If the opposite scenario takes place, this would be the first warning sign of a possible turn in the inflation data in the direction of rising prices at consumer.
Mid-Week US Consumer Prices
Midweek, the US Bureau of Labor Statistics releases the latest US inflation data for the month of June. Market experts expect a further drop to 3.1 percent. If analysts’ expectations are met or even undermined, the chances of a pause in the Fed’s rate tightening at the end of July improve.
If, contrary to expectations, the core inflation rate rises in June, investors could divest more and more of risky asset classes such as the cryptocurrency sector, as the possibility that the US Federal Reserve. US increases interest rates further. According to the CME surveillance tool, the probability of this happening now stands at 92.4 percent.
Gross Domestic Product in the US
This Thursday at 2:30 p.m. (CET) the latest advances in US gross domestic product for the first quarter of 2023 will be presented. Although preliminary forecasts of 1.3 percent growth were once again slightly above estimates of 1.1 percent, they are still well below the final figures for the last quarter of the previous year.
Analysts once again slightly raised the latest estimates of 1.4 percent, which, if true, will indicate at least a stabilization of the US economy. If not, the US financial market is likely to react negatively, so Bitcoin’s course could consolidate as a result and lose steam.
Consumer Expectations and US Consumer Confidence at the End of the Week
This Friday at 16:00 (CET), market participants check the preliminary releases on consumer confidence and consumer expectations for private households for July.
If the improvement in consumer confidence is confirmed and even exceeds the forecasts of the experts, a positive reaction in the financial markets can be expected.
If, on the other hand, consumer confidence falls against expectations and is below analysts’ expectations, the market is likely to react with price cuts.
By Audy Castaneda
