- 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.
Friday morning, Bitcoin started with a small increase. But it failed to rise above $27,000 after a tough rollercoaster week.
Other TOP 10 cryptocurrencies are traded in different directions, but generally flat. The losses of the BNB token continue. The total capitalization of the cryptocurrency market per day increased by 0.35% to $1.1 trillion. And daily trading volume fell by more than a third, down 35.3% to $25.9 billion.
Let’s move on to the general market events for the week.
Monday. ISM PMI in the US and sentiment in the Eurozone
June 5 USA published ISM Manufacturing PMI – Purchasing Managers Index. It reflects the sentiment among service providers. So, in May, the index unexpectedly fell by 1.6 points to 50.3 percentage points. This turned out to be much lower than forecasts (experts expected 52.2 p.p.). But the sentiment indicator remains above the important mark of 50 points. This indicates an increase in economic activity in the service sector.
Also, purchasing managers in the United States significantly decreased the pre-indicators of new and paid orders. The latter fell to lows since May 2020. This gives rise to concerns about a slowdown in the economy.
The next important metric on Monday was industrial orders in USA. They rose just 0.4% from the previous month. Analysts were expecting a stronger 0.8% gain.
This is the second fall in a row. The previous order metric also increased than originally expected (by 0.6% instead of 0.9%).
Also released on Monday report from Sentix on economic sentiment in the Eurozone. They worsened in June for the second time in a row. The index fell 3.9 points to -17.0 p.p. Analysts had expected a more moderate drop to -15.1 p.p. This speaks to growing fears about the economy.
However, on Monday the market was stormy for a different reason. The United States has begun a series of large-scale crypto-repressions. They filed a lawsuit against Binance US on 11 counts.
As a result, a massive withdrawal of funds from the platform and a general panic began. On Monday, the capitalization of the crypto market fell by $32 billion. Most coins fell from 5% to 15%. Bitcoin was worth $25,480, Ethereum was $1,804.94.
Tuesday. Data from China and Europe
On June 6, investor sentiment was in the doldrums. First, they digested the news of lawsuits against Binance and Coinbase. Secondly, in the global market, players’ appetite was weakened by weak trade data from China. They showed that exports and imports in the world’s second largest economy fell more than expected. For the first time since February, export shrunk by 7.5%, although experts expected a fall of only 0.4%. Import indicators amounted to -4.5%. The reason for the decline in exports was weak global demand for Chinese goods (due to high inflation around the world).
As a result, growth prospects for the second-largest economy also deteriorated. This means that the Chinese yuan will not weaken the dollar index (which in theory would be useful for Bitcoin).
Then, on Tuesday, Eurostat data on retail sales. They ended up in stagnation (0%, neither rose nor fell). Economists had forecast growth of 0.2%.
The gloomy mood of investors was reinforced by the World Bank and its report “Prospects for the World Economy”. The organization warned of the fragility of the global economy, as high interest rates could cause problems in low-income countries. The World Bank also expects global growth to slow down from 3.1% to 2.1% this year.
Following the results of all the news, the fall continued on the crypto market on Tuesday. Shares of Coinbase and Microstrategy also fell.
Wednesday. Canada’s unexpected decision, Germany’s problems and OECD forecasts
On June 7, Canada’s central bank unexpectedly raised overnight rate up to 4.75%. This was a 22-year high in the history of the country. Experts assumed that Canada would leave the rate at the previous level.
Then came the quarterly report from Germany. He showed that German industry was again received fewer orders than expected. And recorded a fall of 0.4% instead of growth of 3%.
The Ministry of Economy indicated that development was not weak in all areas. The segments of automobiles and auto parts, as well as chemical products, are growing. But the decline was shown by orders in pharmaceutical products and mechanical engineering.
Also on Wednesday, a report from the Organization for Economic Co-operation and Development (OECD) was released. She gave rather restrained forecast for the global economy. Experts believe that the economy is showing some signs of improvement, but this recovery remains weak. This year, the OECD expects world GDP to grow by 2.7%. This is much less than last year’s growth of 3.3%.
On Wednesday, the crypto market recovered from the previous downturn. Bitcoin traded for around $26,800 (↑4.21%), Ether for $1,870 (↑3.00%). The market has “digested” the panic surrounding the lawsuits against Binance and Coinbase. As well as the news that the SEC requires to freeze Binance assets in the US.
Amid the crypto storm, ARK Invest group funds bought another 419,324 Coinbase shares worth $21.64 million. They took advantage of the moment when quotes fell by 12%. The very next day, Coinbase shares rose 2%.
Thursday. US trade balance, data on the labor market and GDP in the Eurozone
An important metric came out yesterday – trade balance USA. This is the difference between a country’s imports and exports. She’s been in the red lately. According to the latest data, the US foreign trade deficit has grown sharply (to -$74.6 billion). But less than experts expected (-$75.2 billion). Last month, the trade deficit stood at -$60 billion. Decreases in exports and increases in imports were the decisive factors behind the growth of the deficit.
The US trade deficit has already become a chronic disease, as the country is a typical net importer. This shortfall is covered by money from external debt.
Yesterday, the US also introduced new reports on the labor market. The situation here worsened more than expected. The number of initial jobless claims rose by 28,000 to 261,000 (analysts had expected only 235,000 claims).
Initial jobless claims are an important indicator of labor market development. Lately he has been very stable. Therefore, the signs of cooling in this area are very revealing. They talk about the economic slowdown. For crypto traders, this is, oddly enough, a positive moment. Because against the backdrop of unemployment, the Fed may stop raising rates.
A new Fed decision is due on June 14. US interest rates are now between 5% and 5.25%, the highest since 2006.
CME FedWatch Tool predicts 74.8% chance that the Fed will leave rates unchanged. And a 25.2% chance that on June 14 the rate will increase by 25 bp.
Also yesterday, data on GDP in the Eurozone were released. Volumes fell by 0.1 p.p. in the first quarter of 2023. Economists are talking about a technical recession. This happens when output declines for two consecutive quarters (Eurozone GDP also fell in Q4).
Germany suffered the most from the fall in GDP – its output fell by 0.3%. This happened due to last year’s increase in energy prices in the country, which had a strong impact on consumer spending. As a result, household spending in Germany succumbed to inflationary pressures. This, in turn, affected the entire euro area.
Such indicators are not good for the crypto market. After all, a weak euro means a strong dollar (Bitcoin’s main competitor).
The main headliner of yesterday’s sentiment among crypto traders was the SEC and their victims. The Commission has filed a new lawsuit against the American platform Binance. It details transactions worth billions of dollars. The exchange moved client funds through the now-defunct Silvergate Bank and Signature Bank, according to the SEC. The lawsuit also states that Binance bought yachts ($11 million), aircraft ($55 million) from client funds and transferred $62.5 million to its CEO. CZ himself denies such accusations.
Yesterday, bitcoin traded almost unchanged at around $26,400.
Friday. inflation in China
This morning started with a series of news from China. Updated first. consumer price index. It turned out to be lower than expected (0.2% instead of 0.3%). Thus, inflation remains close to zero. This gives the Central Bank enough room to stimulate the economy.
Also, China’s state-owned banks stated that reduce deposit rates to support the economy.
American crypto traders are not in the best mood today. After all, Binance.US is suspending deposits in dollars from June 13th. They explained this as a desire to “protect customers” against the backdrop of increasing regulatory pressure. The American platform added that from next week it will also delist dollar trading pairs, but will continue to support stablecoin pairs.
Meanwhile, trading volume on centralized exchanges has fallen to a four-year low. It’s down 15% this month. About it reported CCData analysts in their latest report. First of all, spot trading and derivatives trading were analyzed. Spot trading fell over 20%. Now they are at a 4-year low (just under $500 billion). The most serious drop occurred on the largest crypto exchange Binance.
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!