Bitcoin price and the cryptocurrency market have fallen amid weak market sentiment due to higher US dollar and Treasury yields as a result of stagflation. As macro factors continue to put pressure on the crypto market, top analyst Markus Thielen presented 10 catalysts that investors are watching as Bitcoin shows no signs of recovery.
Analyst explains cryptocurrency trends
Markus Thielen, CEO of cryptocurrency research firm 10x Research, said it is important to identify and react to catalysts now that 93.8% of Bitcoin has been mined. Additionally, Bitcoin returns are falling 5x every cycle. While the Bitcoin price gave a return of 560 times in 2013, this rate dropped to 21 times in 2021. He added that Bitcoin may only give 4-5x returns this year and buy-and-buy. -hold may no longer work.
1. Fed monetary policy decision dated May 1
FOMC and inflation data tend to significantly influence the direction of Bitcoin price. Following last month’s FOMC, when the Fed left interest rates unchanged and signaled a slowdown in quantitative easing (QT), the BTC price rose. The Fed meeting on May 1 is important for crypto and stock markets because Chairman Jerome Powell may be hawkish and announce no less than three rate cuts this year. All three US inflation data (CPI, PCE and PPI) have turned out to be hotter recently, sparking debate at the Fed desk. ISM Manufacturing PMI and JOLST’s open position data on May 1 may provide the first sentiment before the Fed’s interest rate decision later in the day.
2. May 3 non-agricultural employment payrolls
The U.S. Bureau of Labor Statistics will release nonfarm payrolls on May 3. Weak employment statistics may indicate stagflation is coming. The US economy added 303 thousand jobs in March 2024, the highest number in ten months, compared to downwardly revised estimates of 270 thousand and 200 thousand in February. The U.S. economy added 243,000 jobs in April, according to market expectations, experts said. A strong labor market could delay the Fed’s rate cuts.
3. May 14 PPI inflation data
The Producer Price Index (PPI) will be released by the Bureau of Labor Statistics on May 14. Producer prices in the USA increased by 2.1% annually in March 2024, following the 1.6% increase in February, the highest increase since April 2023. however, it remained below estimates of 2.2%. April data will be important due to rising inflation.
4. May 15 CPI inflation
The US CPI inflation rate accelerated for the second consecutive month in March 2024, reaching 3.5%, its highest level since September, compared to 3.2% in February. The Fed thinks that CPI data is important in making decisions regarding monetary policy. CPI inflation figures on May 15 will determine the direction of the market and potentially trigger a recovery in Bitcoin price.
5. SEC deadline for VanEck’s Spot Ether ETF
VanEck’s Spot Ether ETF application is first in line for the SEC’s final decision on May 23. This will confirm the SEC’s decision regarding other spot Ether ETFs. If confirmed, ETH price will easily surpass $4,000 and trigger a recovery in altcoins. DTCC’s listing of Franklin’s spot Ethereum ETF on its website triggered a 6-8% rise in ETH price over the weekend. However, the SEC is unlikely to approve a spot Ethereum ETF due to shared issues with the SEC and its staff showing lack of interest in the spot Ethereum ETF and its potential.
6. ARK’s Spot Ether ETF
The SEC’s decision on Ark Invest’s spot Ether ETF will be made on May 24, likely the last day investors can expect approval of the Ether ETF.
7. Bitcoin options expiry
Markus Thielen said $9.4 billion BTC and ETH options expiry is a supporting factor for the bullish recovery. However, Bitcoin price crashed on April 26 due to lack of trading volumes and PCE inflation data. The next two major Bitcoin and Ethereum options open interest expirations are on May 31 and June 28.
8. Bitcoin volatility continues until June
He believes that the Bitcoin price will remain volatile until the end of June. The big market move could begin after the two biggest options expire in May and June. According to Deribit data, option traders are betting that the BTC price will reach $100 thousand in September and drop to $70-80 thousand by December.
9. MicroStrategy quarterly earnings report
MicroStrategy will report first-quarter results after market close on April 29. MSTR price closed up 3% at $1,282 on Friday and is currently trading at $1,248, down 2.38% in pre-market hours on Monday. If MicroStrategy adopts FASB accounting rules, effective January 1 next year, it will boost its stock price and increase its earnings significantly.
10. MicroStrategy on S&P 500
If MicroStrategy changes its accounting standards, there’s a good chance the company will be included in the S&P 500 index, which is released quarterly on June 1. There are two requirements for this: a market capitalization of $15.8 billion and 50% of the outstanding shares being tradable.
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