Key Indicators for Bitcoin and Crypto - Trading Week 10

- 5 minute read

Mike Hesp
Mike Hesp

Bitcoin and the majority of the crypto market over the past week continued to extending their price losses from the previous week. While the world's largest stock index, the S&P 500, managed a major recovery in the second half of the week, the Bitcoin price came under greater pressure after negative news about US cryptobank Silvergate briefly corrected the price back to US$22,000. The largest long liquidation of this trading year, worth US$62 million, pushed the BTC price down 5% within hours.

✔️ Focus on Fed Chairman Powell's press conference;

✔️ Jerome Powell and the midweek jobs report from JOLT;

✔️ Consumer and producer prices from China;

✔️ Latest report on the labor market and U.S. unemployment at the end of the week.

In trading week 10, investors can look forward to Fed Chairman Powell's speech on monetary policy. On Wednesday, jobs figures are presented from JOLT and on Thursday, Chinese inflation figures take center stage. The trading week concludes with U.S. unemployment figures on Friday.

Table of Contents

  1. Focus on Fed chairman Powell's press conference
  2. Jerome Powell and JOLT's midweek jobs report
  3. Consumer and producer prices from China
  4. Latest report on the labour market and US unemployment at the end of the week

Focus on Fed chairman Powell's press conference

On Tuesday Fed Chairman Powell's press conference takes centre stage. At 16:00 (CET), look out for the Federal Reserve chairman's statements. New insights on the Fed's monetary policy are expected at the next interest rate decision on 22 March. Any statement from Powell about a change in rates is likely to put markets on edge. With inflation rates rising again, the Fed chairman is likely to continue to see a recession as inevitable.

Jerome Powell and JOLT's midweek jobs report

Wednesday 08 March 2023 at 16:00 (CET), the Fed chairman will give another speech, elaborating on the content of Tuesday's speech. It remains to be seen whether Powell will address possible further Federal Reserve action on the inflation problem. Traditionally, both the US stock market and the crypto sector react sensitively to any new comment from the Fed chairman.

At the same time, the JOLT jobs report for February will be presented by the Bureau of Labor Statistics. The current estimate is 10.60 million job vacancies. In the previous calculation period, the number of job vacancies was 11.01 million. If the number of job vacancies is lower than expected, it indicates an economic slowdown. A deterioration in the labour market would increase the likelihood of an economic downturn in the US. A weak JOLT report could lead to price declines on US stock indices, putting further pressure on crypto market prices. However, if US companies create more new jobs, as they did last month, supporting the strength of the US economy, it could lead to rising prices in the financial market, as was already the case on February 01. Recently, the market has been leaning towards a positive assessment of the strong US jobs figures.

Consumer and producer prices from China

This Thursday 09 March 2023 at 02:30 (CET), China will publish new inflation data for the month of February. Monthly consumer price inflation is expected to rise slightly by 0.1% to 0.8%. If consumer prices in China turn out higher than forecast, China's central bank (PBOC) may also reconsider the current monetary policy to stimulate the economy. On the producer side, analysts expect a -0.5% decline. Recently, producer prices fell -0.8% on a monthly basis, even more than the expert forecast of -0.5%. However, given the Chinese economy's fresh start after the change to the zero-sum policy, such a sharp fall is considered unlikely. The government in Beijing will do its utmost not to stagnate its own economy. Therefore, the figures presented should be treated with caution. Looking ahead, however, rising consumer and producer prices should also force the PBOC to act.

Latest report on the labour market and US unemployment at the end of the week

As the week finale, the updated US non-farm employment (NFP) figures for the month of February are scheduled on Friday 10 March 2023 at 14:30 (CET). After 517,000 new jobs in January, market experts expect 200,000 new jobs to be added in the last reporting period. If the forecast is met or even exceeded, the market experts' suspicion will be confirmed that last month's strong figure was due to a distorted one-off effect of re-hiring many public sector workers. Weak labour market data could then have a negative impact on financial market prices. In contrast, if the resilience of the US labour market is confirmed and analysts' expectations are again exceeded, a positive price trend in financial markets could be expected. This would further reduce the likelihood of a recession.

Also at 14:30 (CET), the US unemployment rate will be published. The forecast remains unchanged at 3.4%. Weak NFP figures are likely to have a negative impact on the unemployment rate, which recently fell 0.1% to 3.4%. The unemployment rate is expected to rise again to December levels. Conversely, if the jobless rate falls again, investors should reward this. However, as this should also further strengthen the US dollar, this could again act as a headwind for the Bitcoin price.