First, there will be the announcement of the gross domestic product (GDP) in the euro area for the last quarter of 2022, then the publication of the final US consumer price indices for January, among other events.

After a bullish first week of trading in February, there was further profit-taking in the stock and crypto markets in the past week. At the end of the week on Friday, the US Bureau of Labor Statistics retrospectively adjusted published inflation rates in recent months, reigniting inflation fears among investors.

In addition, initial jobless claims were above analyst estimates for the first time since the beginning of the year. Given the strong Non-Employment Report (NFP) on February 3, market participants were surprised by this unexpected increase.

Below is a summary of the economic data that will be in focus this week.

Tuesday: Gross Domestic Product in Europe

At 11:00 a.m. (CET), Eurostat will publish the gross domestic product of the Eurozone for the last quarter of 2022.

Analysts forecast growth of 1.9 percentage points. If the forecasts are exceeded and are in the range of the final data for the third quarter of 2022, it would be an indication that the euro area economy is performing better than expected despite the rise in official interest rates.

A strong gross domestic product would encourage the European Central Bank (ECB) to continue raising interest rates steadily when the next interest rate decision is made. However, a significantly weaker gross domestic product would constrain the ECB’s monetary policy actions and is likely to have a negative impact on the strength of the euro.

The US dollar DXY index would thus continue its recovery of the past few weeks, which could spell more headwinds for the Bitcoin price.

This Afternoon: US Inflation Data

Experts now expect a drop to 6.2 percentage points. If analysts’ expectations are confirmed, it could continue the rallying movement that has been underway since the beginning of the year in the stock and crypto markets.

On the other hand, if consumer price indices are above estimates, the US dollar should continue to gain ground in the near term and weigh on risky asset classes.

Wednesday: US Retail Sales in the Spotlight

Mid-week at 14:30 (CET) the updated US retail sales for the month of January are presented. They are considered an important measure to gauge the buying mood of private households.

In the last two months of trading, US retail sales declined again and turned negative. For January, however, experts expect a recovery of 1.6 percentage points.

If the buying mood of private households can stabilize again above the 0 limit and reach the expected value, this could guarantee a price recovery in the stock and crypto market.

If, on the other hand, published retail sales are below expert estimates and remain in the negative range below 0, this would be yet another indication of a weakening US economy.

By Audy Castaneda

A US debt default could affect traditional financial markets such as stocks, bonds and commodities. The impact on the crypto market is complex and can be influenced by factors such as increased demand or regulation.

A debt default refers to the inability of a government to pay its debt obligations. While a debt default is unlikely in America’s overheated politics, nothing is off the table. Therefore, it is still important to understand the consequences of a debt default.

Most of America’s debt is held by institutions, including the Federal Reserve, government-sponsored entities, as well as private investors, such as mutual funds and pension funds. A significant portion is also held by foreign countries, with China and Japan being the largest foreign holders of US debt.

Currently, China alone holds more than $1.5 trillion in US Treasury securities. Other major foreign holders include Ireland, Brazil, and the United Kingdom. The United States government makes regular interest payments on this debt.

Impact of Default on Financial Markets

A US debt default would likely have a significant impact on traditional financial markets, including stocks, bonds and commodities.

Stock prices are likely to fall as investors will panic and sell their assets. Bond prices are likely to fall as well, as the value of debt declines. The value of commodities such as gold and silver could also fall as investors seek safer assets.

Cryptocurrency and the RMB

If the United States were to default on the national debt, it would have serious implications for the global financial system. The US dollar is currently the dominant global reserve currency, but a default would lead to a loss of confidence in the dollar and would cause other currencies, such as the Chinese yuan or even Bitcoin, to gain traction as the global reserve currency.

The Chinese yuan has gained more recognition as a reserve currency in recent years. Due to the growing economic influence of China and the efforts of the Chinese government to internationalize its currency.

In the event of a US debt default, the yuan could become a more attractive option for central banks and investors looking for an alternative to the US dollar.

Politically speaking, this would be in line with what Beijing has been trying to achieve for years: replace the dollar with the RMB. A default by the US government would give China a great opportunity to make its case, both politically and economically.

The impact of a US debt default on the cryptocurrency market would be more complex. On the one hand, investors may flock to crypto as a safe haven, driving up prices.

On the other hand, the turmoil in the financial markets could cause a decrease in the general demand for cryptocurrencies, which would cause prices to fall. A US debt default could lead to further regulation of cryptocurrencies, as governments look for ways to stabilize their economies.

A debt default would have a significant impact on financial markets, including the cryptocurrency market. While the exact impact is difficult to predict, it is important to understand the potential consequences.

By Audy Castaneda

It was a bullish Saturday session for Ethereum (ETH. Regulatory risk and fear of the Fed limited upside potential.

After a morning of range bound, ETH fell to a low of $1,505 by late afternoon. Pulling away from the first major support level (S1) at $1,484, ETH rallied to a late high of $1,544. Being range bound from the first major resistance level (R1) at $1,548, ETH pulled back to end the session at $1,539.

On Saturday, bitcoin (BTC) rose 1.04%. Reversing a 0.73% loss from Saturday, BTC ended the day at $21,865, below $22,000 for the third session in a row.

Bullish Saturday Session and Fed Fears

A mixed start to the day saw BTC fall to an early low of $21,614. Moving away from the first major support level (S1) at $21,448, BTC surged to a last-hour high of $21,907. BTC briefly broke above the first major resistance level (R1) at $21,885, before pulling back to end the session at $21,865.

On Saturday, regulatory risk and Fed fears continued to test buyers’ appetites. Despite the bullish session, ETH failed to reach $1,550 and BTC failed to recapture the $22,000 level.

Fed Fear remains another hurdle for investors to tackle. On Tuesday, the US CPI Report could dictate the Fed’s near-term monetary policy. The January jobs report shifted sentiment to a more hawkish outlook, with Fed talk pointing to a top interest rate above 5%. Higher for longer would be bearish.

Ethereum (ETH) Price Action: Technical Indicators

ETH was down 0.50% at $1,531. On a mixed morning, ETH rose to an initial high of $1,540 before falling to a low of $1,529.

ETH needs to avoid a drop through the $1,529 pivot to target the first major resistance level (R1) at $1,554. A return to $1,550 would signal a breakout session. However, updates from the Shanghai hard fork and crypto news leads should support ETH to support a breakout.

In the event of a prolonged rally, the bulls would likely test the second major resistance level (R2) at $1,568 and resistance at $1,600. The third major resistance level (R3) sits at $1,607.

A drop through the pivot would bring the first major support level (S1) into play at $1,515. However, barring another crypto market sell-off, ETH should avoid less than $1,490. The second major support level (S2) at $1,490 should cap the downside. The third major support level (S3) sits at $1,451.

Looking at the EMAs and the 4-hour candlestick chart, it was a bearish sign. Ethereum broke below the 200-day EMA, currently at $1,546. After a bearish crossover on Saturday, the 50-day EMA pulled back from the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, providing bearish signals.

A move through the 200-day EMA (1,546) would support a break of R1 ($1,554) to give the bulls a run into R2 ($1,568) and the 50-day EMA ($1,589). However, a failure to move through the 200-day EMA ($1,546) would leave S1 ($1,515) and lower support levels at $1,500 in sight. A move through the 50-day EMA would send a bullish signal.

By Audy Castaneda