- Several important events await us in the coming days;
- Crypto investors should keep an eye on them to understand market sentiment.
The last trading week was not the most successful for the market. Bitcoin has tried three times to gain a foothold at around $25,000, but so far to no avail. Read more about this in our material.
The same situation is in the stock market. Rising inflation rates in Europe and the US forced investors to flee risky assets into defensive stocks and the dollar. The S&P 500 stock index recorded its biggest daily loss since the beginning of 2023.
The new week started with growth. BTC is trading at $23,417.73 (+1.17%), but on a weekly basis it has lost about 3.2%.
The total capitalization of the cryptocurrency market grew by 1.9% to $1.08 trillion. And trading volume over the past 24 hours fell 8.2% to $34.35 billion.
Of course, participants are interested in whether the current correction in the crypto market has ended, or whether new lows should be expected. It largely depends on the dollar index (DXY) and key metrics.
Therefore, as always, we follow the macro data.
Monday. US Durable Goods Orders
This data will be released at 14:30 local time. Experts expect a figure of 2.5%.
In the previous month, incoming orders for this group of goods greatly exceeded analysts’ forecasts. As a result, we observed a revival in the stock and crypto markets. By this logic, let’s hope that in February these figures will be equal or higher than forecasts.
Tuesday. Consumer Confidence report (consumer trust)
Consumer sentiment metrics will provide insight into households’ views on the economic outlook and inflation expectations. After an unexpected fall in the index in January, economists now expect a rise to 108.5.
If the forecast is met or even exceeded, the dollar index (DXY) should continue the uptrend of the previous week. This means that this should once again have a negative impact on the price dynamics on the crypto market.
On the other hand, if analysts’ expectations are not met and CB falls even more, the likelihood of a recession in the US will increase. So this too could have a bearish effect on BTC prices and companies. Therefore, we see a dual impact on the markets here, and it is extremely difficult to make market forecasts in this case.
Wednesday. ISM index for the manufacturing sector
Investors in the middle of the week expect the publication of the purchasing managers index (PMI) ISM in the US manufacturing sector. Forecast – 48.0.
In the previous case, the purchases turned out to be lower than the forecast, but the stock and cryptocurrency markets rose in price as a result. One of the reasons for this was a significant correction of the dollar index.
If the manufacturing sector continues to show sustained negative development, the Fed may move away from its hawkish stance at the next meeting on interest rates.
And vice versa. The high value of the index will put pressure on the stock markets, as it will further increase the likelihood of another interest rate hike. As a result, risky stocks, and with them the BTC rate, will have a downward trend.
Friday. ISM index for services
On March 3, the ISM Purchasing Managers Index (PMI) for the US services sector will be released. Last time this indicator was equal to 55.2, which is much higher than the experts’ expectations of 50.4. As a result, the dollar index strengthened significantly. But this did not lead to a strong decline in prices in the stock and cryptocurrency markets.
Experts predict a slight decline to 54.5 in February. If the forecast clearly does not come true, as it did recently, the dollar index should continue its bullish recovery and put pressure on the cryptocurrency market.
By the way, the service sector has recently begun to behave differently than other sectors (manufacturing and real estate), showing much greater resilience. If, contrary to expectations, it weakens this time, it will be a clear sign that the US economy as a whole is cooling down. It remains to be seen whether such data will encourage investors to buy more stocks and cryptocurrencies. However, for the US Fed, there is a paradox here: they welcome the weakness in the services sector, as this will increase the fall in inflation in the coming months.