Key indicators for Bitcoin and Crypto - Trading Week 9

- 5 minute read

Mike Hesp
Mike Hesp

The past trading week was marked by profit-taking in financial markets. An increasingly negative picture in the real estate market combined with rising inflation rates in Europe and the U.S. caused investors to increasingly flee into less volatile stocks and the U.S. dollar. The world's largest stock index, the S&P 500, posted its biggest daily loss in the second half of the week for in 2023. The price corrections in the traditional financial market also caused the Bitcoin price, followed by the entire crypto market, to fall in value. Bitcoin fell to a new 10-day low of $22,770 over the weekend, but still managed to recover above the psychological price barrier of $23,000.

✔️ Figures on US consumer confidence;

✔️ US manufacturing purchasing managers' index;

✔️ US service sector purchasing managers' indices.

In trading week 9, investors can keep an eye on U.S. consumer confidence. These figures will be announced on Tuesday. For the rest of the week, the ISM purchasing managers indices for the U.S. manufacturing and services sectors will be decisive. These figures will be announced Wednesday and Friday.

Table of Contents

  1. Figures on US consumer confidence
  2. US manufacturing purchasing managers' index
  3. US service sector purchasing managers' indices

Figures on US consumer confidence

On Tuesday 28 February 2023, the Conference Board (CB) will release new figures on US consumer confidence for the trading month of January at 16:00 (CET). The level of optimism about economic development in the US fell short of expectations of 109.0 at 107.1 in the previous month. For the month of February, analysts still expect a slight increase to 108.5. If expectations are met or even exceeded, the US dollar index (DXY) should continue its upward movement from the previous week. As in the previous trading week, this should again have a negative impact on price movements in the crypto market. On the other hand, if analysts' expectations fail to materialise and consumer confidence continues to fall, the likelihood of a recession in the US increases. Despite a falling US dollar, a fall in the stock market could be a consequence. This too often has a negative effect on crypto market prices.

US manufacturing purchasing managers' index

This Wednesday, market watchers can look at the ISM Purchasing Managers' Index (EMI) for the US manufacturing sector. The figures will be released at 16:00 (CET). For the month of February, experts expect a reading of 48.0. Although the index calculated by the Institute for Supply Management in the US was recently below the forecast of 48.0 at 47.4, the stock market and crypto market subsequently rose in value. One reason for this was the significant correction in the US dollar index. This is because the US Federal Reserve is likely to take into account a continued negative trend in the manufacturing sector when it makes its interest rate decision on 22 March and could therefore deviate from its continued hawkish stance. In contrast, a better-than-expected index result could put renewed pressure on US equity markets as it would likely further increase the likelihood of a further interest rate adjustment. As a result, risky stocks in particular could trend weaker, and with it, the Bitcoin price.

US service sector purchasing managers' indices

The trading week ends with the ISM Purchasing Managers' Indexes (EMI) for the US services sector. On Friday, these figures will be released at 16:00 (CET). Recently, the published Purchasing Managers' Index figures for January came in at 55.2, well above experts' expectation of 50.4. As a result, the US dollar index strengthened significantly. However, a correction in the stock and crypto markets was not too bad. For the month of February, market experts predicted a slight decline to 54.5. If the forecast comes true or is exceeded, the US dollar index is likely to continue its bullish rally, likely creating selling pressure in both equity and crypto markets.

The services sector has recently decoupled from other sectors, such as manufacturing and real estate, and has proved much more resilient. If, contrary to expectations, the services sector also weakens, it would be a strong indication that the US economy as a whole is cooling. Whether this development will prompt investors to buy stocks and cryptocurrencies remains to be seen. The US Federal Reserve would encourage a weak services sector as it would increase the chances of falling inflation in the coming months.