Traders should prepare for a sharp increase in volatility.
After the altcoin sell-off and the resulting (moderate) drop in the Bitcoin price on Friday, the digital asset market may be facing the most explosive week of the year. Extremely important events are coming up in the trading week that begins today.
Specifically, those events include the release of the US Consumer Price Index (CPI) and Producer Price Index (PPI), the US Federal Reserve Bank (Fed) interest rate decision in the Ripple v. SEC, an SEC response to Coinbase’s rulemaking request, and a US District Court hearing on the SEC’s request for a preliminary restraining order against Binance US, and much more.
Tuesday Becomes Blockbuster Day
Tuesday is packed with important events. At 8:30 am, the US Bureau of Labor Statistics releases the latest US inflation data for the month of May. In recent months, the annualized CPI (YoY) has shown a strong downward trend, falling to 4.9% in April. For May, the experts expect a new drop to 4.1%.
If analysts’ expectations are met or even lowered, the chances of a Fed rate pause will improve. The US financial market can be expected to benefit from declining inflation rates, and the Bitcoin and crypto markets will also benefit.
However, close attention will also be paid to the underlying inflation rate and the monthly inflation rates. These numbers recently did not progress as expected by US monetary regulators and remained at elevated levels.
The US Securities and Exchange Commission (SEC) is due to respond to Coinbase’s request for rulemaking by that day. Also, at 2:00 p.m., the hearing on the SEC’s Temporary Restraining Order (TRO) against Binance US will take place. Last week, the SEC asked a federal judge in Washington, DC, to freeze the assets of Binance’s US subsidiary.
Furthermore, the alleged disclosure of internal SEC Hinman documents in the Ripple case could be of paramount importance to the crypto market. The Hinman documents could provide insight into Ethereum (ETH)’s previous classification as a non-security, which is now being challenged by SEC Chairman Gary Gensler.
Last but not least, Tuesday also marks the end of the public comment period for the SEC’s proposed expanded definition of exchange, which could require DEXs to register as stock exchanges.
More Crucial Events for Bitcoin and Crypto this Week
On Wednesday, June 14, the Fed will announce its latest interest rate decision at 2:00 p.m. m.
Currently, according to the CME FedWatch tool, only 26% of market participants still expect another 25 basis point rate hike.
Considering the slow cooling of the US economy and job market, most assume a pause in interest rate hikes by the Federal Reserve. Both the stock and Bitcoin markets are likely to react positively if the Fed lives up to these expectations.
Also on Wednesday, the Producer Price Index (PPI), possibly another leading indicator of rapid disinflation, will be released.
Other events worth mentioning are jobless claims on Thursday and customer sentiment on Friday. Therefore, the week is packed with extremely important events.
Bitcoin and cryptocurrencies are likely to react in a highly volatile manner. Currently, Bitcoin’s price stood at $25,843, holding above the 200-day EMA.
By Audy Castaneda
