Key Indicators for Bitcoin and Crypto - Trading Week 14

- 7 minute read

Mike Hesp
Mike Hesp

De Bitcoin price made another sideways move last trading week and could not follow the rally of US stock indices. Lower-than-expected PCE inflation data caused the Nasdaq and S&P500 to close at weekly highs. Despite Bitcoin taking a breather, this trend is currently still positive. The fact that the cryptocurrency's correlation with the U.S. stock index S&P500 continued to decline in the last few weeks of trading, according to Coin Metrics, also indicates increasing isolation from traditional financial markets. Of note is the continued resilience against negative news, such as the CFTC's lawsuit against US crypto exchange Binance. As long as the BTC price remains stable within last week's trading range and the buy side can defend the area between US$26,500, the view should be further upward for now. These developments are important for the Bitcoin price this week:

✔️ US manufacturing purchasing managers' index;

✔️ JOLT's jobs report;

✔️ US service sector purchasing managers' indices;

✔️ US labour market report and unemployment rate .

Table of Content

  1. US manufacturing purchasing managers' index
  2. JOLT jobs report
  3. US service sector purchasing managers' indices
  4. US labour market report and unemployment rate

US manufacturing purchasing managers' index

Today at 16:00 (CET), the US manufacturing sector purchasing managers' index (ISM) will be published. For last March, experts expect a further decline to 47.5. In the month of February, the recorded index was last below the forecast of 48.0 at 47.7. If the purchasing managers' index corrects again, a consolidation in US equity markets can be expected, as in the previous month. Bitcoin benefited today from weakness in the US dollar index (DXY). It remains to be seen whether the trend of relative outperformance of the BTC price against US equity markets can continue. On the other hand, if the manufacturing sector stabilises and exceeds experts' forecasts, the US equity market should remain bullish. Optimally, the crypto sector could also join this positive move and trend back towards the previous week's highs. Traditionally, the turnover is below average in the week before Easter, so a continued sideways move should not be surprising.

JOLT jobs report

Next Tuesday 04 April at 16:00 (CET), the latest JOLTS jobs report for the month of March will be presented. The latest estimate is 10.40 million job vacancies. In the previous calculation period, the number of vacancies was still 10.82 million, which was about 200,000 jobs below the figures published in February. Despite the steady decline in the number of vacancies, analysts' pessimistic forecasts have been consistently exceeded since October 2022. If the number of job vacancies is now below expectations for the first time, it would be an indication that the economic slowdown in the US economy predicted by market experts for some time has set in. A deterioration in the jobs market would further increase the likelihood of an economic downturn in the second quarter. A weak JOLTS report is likely to lead to price declines in the US stock market again and could also put further pressure on prices in the crypto market. However, if US companies continue to create more new jobs than predicted, the chances of a bullish price movement in the US stock market increase. In recent months, the financial market has reacted positively to a resilient JOLTs report.

US service sector purchasing managers' indices

This Wednesday 5 April, the latest purchasing managers' indices (EMI) for the US services sector take centre stage. These will then be published at 16:00 (CET). The latest figures presented for the month of February came in at 55.1. This was again above expectations of 54.5. The services sector is again showing resilience, leading to a significant rise in US stock market prices. If the expectation of 54.5 is beaten again, it will be a good sign for the stock and crypto markets. Both the equity and crypto markets could then benefit again.

If the services sector weakens sharply contrary to expectations, it would be a clear signal that the US economy as a whole is increasingly cooling. Investors could divest more and more shares from this sector, which would manifest itself in falling prices of stock indices such as the S&P500 in particular. However, the effect on the crypto market is difficult to predict. As long as the Nasdaq does not fall significantly again, the crypto market may remain largely unaffected, given its recent low correlation with the largest US stock index. Problems in the services sector should also increase the chances of a further decline in inflation in the coming months.

US labour market report and unemployment rate

The trading week concludes with the US labour market report and unemployment figures. On Friday, both will be published at 14:30 (CET). Despite Good Friday, the latest US non-farm employment (NFP) figures for the month of March will be presented. It is expected to add 213,000 new jobs in March. This is far below February's data. Back then, there were 265,000 new jobs created. If the forecast is beaten for the seventh consecutive month, a positive reaction in financial markets can be expected. A recession, considered very close by many analysts, would be postponed. Weak labour market data, on the other hand, is likely to have a negative impact on financial market prices and cause consolidation.

At the same time, US unemployment figures for the month of March will be released. The expectation of market experts is 3.6%. Despite a strong labour market report, the unemployment rate recently rose to 3.6% from 3.4%. Whether this negative trend is only temporary remains to be seen. Continued weakness in the real estate and construction sectors could further increase the jobless rate. If the number of new jobs created remains below analysts' expectations, unemployment is likely to rise further to December 2022 levels. However, in view of a public holiday, US stock trading remains closed. Only the futures market is open and so indices could move. A major reaction to the published figures is therefore not expected until Easter Monday, 10 April.