If economists fail to predict the economic development in the US, the devaluation of the dollar might favor cryptocurrencies. A weaker-than-expected GDP growth would weaken the US economy, generating greater volatility in financial markets.
Despite the significant drop in prices and the improved inflation situation last week, the crypto market did not immediately benefit. The announcement by cryptocurrency broker Genesis that it would undergo a restructuring caused further uncertainty among investors following the bankruptcy of FTX.
Although the price of Bitcoin reached a new yearly low, it could recover to around USD 16,500 by the end of the week. However, crypto market participants see the new speeches from Christine Lagarde, the ECB chair, and Jerome Powell, the Fed chair.
Central Bank Presidents Speak on Monetary Policies
Market players await information on monetary policy measures from Christine Lagarde and US central bankers Bullard and Williams. Investors will scrutinize their statements to understand upcoming ECB and Fed interest rate decisions better.
If the representatives of those central banks insist on their aggression, the crypto market might face a greater threat. The value of the US dollar might regain strength and cause Bitcoin to drop toward yearly lows.
US Consumer Confidence Might Boost Cryptocurrencies
Optimism about economic development in the US at 102.5 in October was well below expectations of 106.0. Based on a bearish reading, US consumers expect the domestic economy to continue struggling to recover.
Experts forecast a value of 100.0 for this month, but if they fail again, the US dollar will lose strength. Of course, that situation might have a positive effect on the prices of Bitcoin and altcoins.
Meanwhile, Bitcoin is trading at around USD 16,224 and has accumulated a 1.8% loss over the last 24 hours. While its daily trading volume is above USD 19.55 billion, its market capitalization is about USD 311.81 billion, according to CoinGecko.
European Inflation, US GDP, and the Speech of Powell Might Affect Cryptocurrencies
This week begins with the anticipated publication of consumer prices in Europe. After the last 10.6%, experts expect a slight decline of 10.6 percentage points to 10.4%. If the inflation rate does not reach the adjusted expectations, the effect on the financial markets would be positive.
Regarding the US gross domestic product (GDP), economists forecast a further slight improvement to 2.7%. If that indicator could recover strongly enough, the Federal Reserve might raise key interest rates by another 75 basis points to 4.75%.
However, if the gross domestic product is weaker than expected, the devaluation of the US dollar might positively impact cryptocurrencies. The words of Jerome Powell on the US economic outlook might generate greater volatility in financial markets.
Independently on what experts say, investors should research cryptocurrencies to know their all-time highs, behavior, and possible future prices. That will allow them to make better investment decisions and minimize their loss of money. However, it is only a matter of time before seeing where the market will take the value of crypto assets.
By Alexander Salazar
