Key Indicators for Bitcoin and Crypto - Trading Week 16

Last week, we saw a price correction in the Bitcoin price and the rest of the crypto market followed along. Worse-than-expected sales figures and announced price cuts at carmaker Tesla caused a correction from mid-week onwards. Weak data from the US real estate sector reinforced the negative trend and acted as additional headwinds for Bitcoin. Gold and silver prices, which so far showed a high price correlation with the cryptocurrency in 2023, also slid to new weekly lows. On a weekly basis, Bitcoin prices corrected by 11% to US$27,133 before stabilising. The second largest cryptocurrency, Ethereum (ETH), lost about 14% of its value. These developments are important for the Bitcoin price this week:

✔️ Figures on US consumer confidence;

✔️ Key figures of new US durable goods orders;

✔️ Gross Domestic Product in the US;

✔️ Core PCE inflation in the US at the end of the week .

Table of Content

1. Figures on US consumer confidence
2. Key figures of new US durable goods orders
3. Gross Domestic Product in the US
4. Core PCE inflation in the US at the end of the week

Figures on US consumer confidence

Tomorrow, Tuesday 25 April 2023, the Conference Board (CB) will publish the latest US consumer confidence figures for the past March at 16:00 (CET). At 104.2, optimism about US economic development recently exceeded experts' expectation of 101.0. This means that consumer confidence has recently stabilised somewhat after weakening in previous months. For April, analysts forecast a slight drop to 104.0. If the forecast is met or even exceeds expectations, the Bitcoin price should be able to benefit just like the previous month. If expectations go unmet, as they did at the beginning of the year, it would be a further indication of an impending US recession in the second half of the year. In the recent past, weak consumer data has increasingly been interpreted negatively by the financial market. Consequently, continued weak consumer confidence could signal a broader correction in the crypto market.

Key figures of new US durable goods orders

This Wednesday, 26 April, at 13:30(CET), the final figures for the core rate of new orders for durable goods in the month of March will be released. In the previous month, the core rate fell to -0.1%, below analysts' expectations for the first time since October 2022. For March, experts expect another decline of -0.2%. If the figures are in line with expectations and new orders continue to fall, the US dollar should strengthen, as it did in March. Headwinds for the crypto market would then not be surprising. However, if new orders are above experts' forecasts, the stock market could turn bullish in an initial reaction and the crypto sector could also stabilise. Investors should continue to keep an eye on the US dollar index (DXY). Prices within the crypto market are currently very sensitive to US dollar rate movements.

Gross Domestic Product in the US

On Thursday 27 April 2023 at 14:30 (CET), the pre-published US gross domestic product figures for the first trading quarter in 2023 will be presented. The recent weak data led to a price correction in equity markets and also in the crypto market. The initial forecast for the past trading quarter of 2% economic growth is significantly lower than the final data of 2.6% for the last quarter of the previous year. If the experts' forecast is confirmed, it points to a noticeable decline in US growth in the first three trading months. The financial market is likely to react anxiously to persistently weak economic data and increasingly shed equities and crypto assets. On the other hand, if the current expectation is significantly exceeded, a positive market reaction can be expected. The Bitcoin price should then stabilise and start a bullish recovery move.

Core PCE inflation in the US at the end of the week

The trading week concludes on Friday with core US inflation figures. At 14:30 (CET), the Bureau of Economic Analysis will release the latest core inflation figures for the previous March. The latest core figure was +0.3%, slightly below the forecast of +0.4%. Market analysts expect another unchanged increase of +0.3% for the March trading month. Should core inflation move higher than experts' expectations, investors are likely to be bearish on it, as the US Federal Reserve could stick to its hawkish monetary policy to fight inflation. Consequently, a weak end to trading on Friday would be expected. On the other hand, if core inflation rises less than analysts expect, as it did last month, investors could see this as a positive sign and invest more in equities and also cryptocurrencies. Bitcoin prices should continue to benefit from falling inflation data.