Key Indicators for Bitcoin and Crypto - Trading Week 12
- 7 minute read
Despite the ongoing liquidity problems of several US banks, the takeover of major Swiss bank Credit Suisse by Swiss UBS Bank and the interest rate hike by the European Central Bank, the crypto world continues to react positively. Bitcoin has risen more than 28% in a week to $28,478 . Confidence in the new 'digital gold' is currently huge and Bitcoin is currently seen by many as a safe haven. Can Bitcoin maintain this momentum? These developments are important for the Bitcoin price this week:
✔️ US housing market in focus;
✔️ US Fed rate decision mid-week;
✔️ US real estate sales;
✔️ Core rate US new durable goods orders figure.
Table of Content
- US housing market in focus
- US Fed interest rate decision mid-week
- US real property sales
- Core rate US new durable goods orders figure
US housing market in focus
This Tuesday at 15:00 (CET), the National Association of Realtors will present the latest figures on sales of existing homes for the month of February in the US. The data collected describe the state of the real estate market, which is so important for the US, and therefore gives a good insight into the country's economic development. If the sales figures exceed experts' expectations, this indicates rising consumer spending and a stabilisation of the US economy. If the forecasts are not met, it would confirm a continued cooldown in the housing market. Experts forecast 4.17 million home sales. This is 170,000 more home sales than in January. If the published figures meet or exceed expectations, the US dollar would remain weak. This should again have a positive effect on the crypto market. In contrast, weak housing market data lead to a recovery of the US dollar in the previous month, which could act as a headwind for the price development of Bitcoin and the rest of the crypto market.
US Fed interest rate decision mid-week
On Wednesday 22 March 2023, the US Federal Reserve's interest rate decision is expected to be published at 19:00 CET. The US monetary watchdog will announce its latest interest rate adjustment. According to the CME FedWatch Tool the majority of analysts expect an increase of just 0.25%. In the days before the failures of the three US banks, the majority of investors had still expected 0.5%. Fed chairman Powell is under enormous pressure given the problems in the banking sector and the ongoing liquidity squeeze, and is facing increasing criticism from politicians. Many market participants are calling for a exit of his hawkish monetary policy. But if he pauses interest rate adjustments, the market could also see this as a negative, as he risks neglecting inflation in favour of the problems in the banking sector.
This could cause further turmoil in the markets. In Powell's subsequent press conference at 19:30 (CET), the Fed chief will have to provide clarity on central bank policy. Although in a collaborative action with the US Treasury the week before, the Fed presented the Bank Term Funding Program (BTFP), which will make up to US$3 trillion of liquidity available to the banking sector, the market calmed only briefly. The aim of the programme is to increase confidence in the monetary system. It is also meant to stabilise the banking system and provide sufficient liquidity if needed in case of new bottlenecks such as at Silicon Valley Bank (SIVB). Experts will carefully study Powell's comments on this topic and on future monetary policy in the coming months to derive possible indications of a change in fiscal policy orientation that may be needed in the near term.
US real property sales
On Thursday 23 March 2023 at 15:00 (CET), the latest figures on new property sales in the US will be presented. Property sales are considered a good indicator of citizens' current willingness to consume and the health of the housing sector. If the housing sales are weaker than the 648,000 single-family homes expected by experts, it would indicate a deterioration in consumer spending and weakness in the housing market and thus in the construction sector. In the previous month, the number of houses sold was 670,000, above the 620,000 expected. Should weakness in the housing market pick up after stabilising in previous months, the US dollar should also come under further pressure, which should have a positive effect on the Bitcoin exchange rate.
Core rate US new durable goods orders figure
Friday 24 March 2023 at 13:30 (CET), the final figures for the core rate of new orders for durable goods in the month of February will be released. After a significant month-on-month increase to 0.7%, the core rate was 0.5% above analysts' expectations. A slight increase of 0.2% is forecast for February. If the figures are in line with forecasts and new orders continue to rise, the US dollar should strengthen slightly. As the stock market has also been bullish recently after strong new orders, it is difficult to predict how the market might perform after the release of weak data. If the US dollar weakens further as a result of the published data, it could be bullish for Bitcoin. Any weakness in the US dollar index (DXY) should give the cryptocurrency an additional boost.