- Let’s run through the macro data that came out this week
- And let’s see what news influenced the BTC charts
Every Monday we prepare an economic calendar for readers. It helps to track the mood of investors and predict their actions. Now let’s sum up. Let’s look at the economic week and the market in a general perspective.
What’s going on with bitcoin
The blockchain world continues to evolve and Bitcoin is back in the spotlight. This week, the king of cryptocurrencies broke through the $30,000 mark and hit a 2-month high. Experts believe that this is due to the wave of applications for exchange-traded funds. Within 10 days, BlackRock, the world’s largest asset management giant, as well as Valkyrie, Invesco, WisdomTree and Bitwise, filed their bids.
Bitcoin dominance jumped above the 50% level, marking a two-year high. April 2021 was the extreme period when BTC dominance exceeded 49%. At that time, the king of cryptocurrencies was trading above $53,000.
Lawsuits in recent weeks have resulted in drastic losses in the crypto market. U.S. investors began withdrawing funds sharply after Binance warned it was losing support from traditional banking partners. But today there was important news – Binance US agreed with banks and resumed the withdrawal of fiat dollars.
In parallel, a number of other important processes are taking place in the world. They influenced the market in one way or another.
Monday. Speech by a member of the ECB
Monday was a quiet day because the US stock markets were resting (a national holiday). Came out in the evening housing market index USA, reflecting the mood of the builders. It hit an 11-month high of 55 in June, beating analysts’ expectations. A metric above 50 indicates that more homebuilders think the market is good than bad. So, the gloomy forecasts of experts are not entirely justified.
Also on Monday, ECB Executive Board member Philip R. Lane made a speech. He said another interest rate hike in July seemed appropriate. And the September decision will depend on further data. The MEP is quite confident about the chances of quickly reducing inflation to the target level of 2% set by the central bank.
Bitcoin fluctuated in a narrow channel after the weekend and continued to move sideways at $26,000. Ether recovered from a three-month low set in the middle of last week and stabilized above $1,700.
Tuesday. Problems of China and real estate in the USA
On Tuesday the People’s Bank of China lowered basic rates on one-year and five-year loans up to 3.55% and 4.2%. In the comments, the authorities noted that they are striving to accelerate the economic recovery after the pandemic, it is slower than expected. This lowered the appetites of investors who had previously predicted a sharp rise in China.
In addition to this, US transportation giant FedEx Corp. presented a worse-than-expected outlook in its fourth quarter report. He cited “continued weakness in demand,” reports Bloomberg.
Also on Tuesday, data from the US Census Bureau on the number of new buildings was released. In May it reached 1.63 million, up 20% from April. The data significantly beat analysts’ expectations of a 0.1% decline. This indicates strong demand in the US housing market and a strong economy overall.
Bitcoin surged almost 2% on Tuesday but lost its bullish momentum around $27,000. Ethereum continued to hover in a tight range just above $1,700.
Wednesday. UK recession and Powell’s landmark speech
Wednesday’s macro data began with news from the UK. Inflation in the country remained at 8.7%, while economists had expected a decline to 8.4%.
The main event of the day was the speech of Fed Chairman Powell before the US Congress. He said the interest rate should be higher to tame inflation. The CPI is now around 4.05%, double the Fed’s target of 2%.
For the crypto market, Powell’s view that cryptocurrencies like Bitcoin have “endurance” as an asset class has become more important. And that the central bank treats stablecoins used for payments as a form of money. In the end, the official said that the central bank should play a more active role in regulating stablecoins.
On such statements, Bitcoin gained bullish momentum and rose to its strongest level since May. By Wednesday evening, it was trading above $28,800. Ether rose to $1,800.
Thursday. Euphoria in the crypto market
Yesterday came the primary data on applications for unemployment benefits in the US for the week. They have not changed and amounted to 264 thousand (as in the previous week). The number of applications is the highest level since October 2021.
Later released Chicago Fed National Activity Index for May. It dropped to -0.15 from 0.14.
Also yesterday was the second day of Federal Reserve Chairman Powell’s speech. He reiterated that interest rates are likely to rise further.
On Thursday, the Bank of England (BoE) surprised the markets with a 50 basis point rate hike (instead of the expected 25 bp). The authorities said they would need further tightening of monetary policy if inflation proved to be more sustainable.
This news did not dampen the optimism of crypto investors. Valkyrie filed an application to register a spot Bitcoin ETF yesterday. This is the fourth major investment company in the last week.
The ETF filings have raised hopes for a resurgence of institutional interest in the crypto industry, which is struggling with US repression.
The positive dynamics for the crypto market was fueled by Mastercard Inc., the second largest payment provider in the world. They announced that they will expand the Engage network to include more blockchain and digital asset partners. Mastercard Engage connects businesses with qualified payment processors and supports transfers across multiple cryptocurrencies.
This positive news is reflected in the charts. Bitcoin broke the $30,000 mark, followed by most of the altcoins.
Friday. PMI in Eurozone
Today, S&P Global releases preliminary June manufacturing and services PMI data for Germany, the Eurozone, the UK and the US. It turned out that business sentiment in the EU has deteriorated significantly. The PMI fell 2.5% to 50.3%. This indicates that after a short spring recovery, economic growth in the Eurozone has practically stopped.
Against this background, the dollar index has strengthened, now it is at the level of 103 p.p. At the same time, stock indices and cryptocurrencies fell slightly.
After yesterday’s rise, Bitcoin lost 0.3% and is trading at $30,002.83. The Ethereum exchange rate is $1,883.85.
The crypto market was affected by the news from the Nevada state regulator. He ordered crypto custodian Prime Trust to stop operations. Authorities allege that the firm is unable to execute customer withdrawals due to a “lack of customer funds.” The move raised market concerns as Prime Trust was a technical partner of TrueUSD (TUSD), the fifth largest stablecoin by market cap.
However, BTC ends the week up 17%. Ethereum added 12%.
Despite recent gains, the price of bitcoin has remained well below the all-time high of $70,000 hit at the end of 2021. Cryptocurrency trading volume has also fallen in recent weeks due to the uncertainty caused by the SEC lawsuits.
This concludes the trading week. Don’t miss our new economic calendar on Monday. Also, do not forget to follow the latest news on our website. Have a nice weekend everyone!