The crypto market continues to struggle after the dramatic collapse of FTX. The crash plunged the market into uncertain waters. The flagship of the market, Bitcoin (BTC), cannot show any significant movement in either direction. However, it is possible that this situation will change depending on the events that will take place next week.
Next week’s agenda: US CPI and Fed rate decision
The most important agenda next week will be the Federal Reserve’s (Fed) interest rate decision. However, the US Consumer Price Index (CPI) report, which will guide the Fed’s future decisions, will also be on the market’s radar. Meanwhile, the US CPI will be released on Tuesday, December 13. The Federal Open Market Committee (FOMC) meeting, where the Fed will discuss possible rate hikes, will end on December 14.
According to experts, it is possible that the consequences of these events have a strong impact on the Bitcoin price. Especially the CPI report to be published by the Bureau of Labor Statistics will be important. The report will reveal changes in inflation data or the rise in consumer prices throughout November. These data are unlikely to affect the Fed’s December rate decision. However, it is certain that it will be decisive in the steps to be taken in the future.
Macroeconomic effects on Bitcoin
If CPI data rises, it could give a reason for the Fed to tighten further. In this case, it is possible that it will put additional pressure on the price of Bitcoin, as in June. US May CPI figures released in June showed the highest level since November 1981. This wiped out $15 billion from Bitcoin’s market cap in just ten minutes.
However, if it comes in lower-than-expected like the previous month, Bitcoin may finally get the push it needs to recover. cryptocoin.comAs you can follow, the US October CPI data came in below expectations. After this data, Bitcoin reacted by adding $15 billion to its market cap in just 15 minutes. Something similar in August had a positive impact on the crypto market. The market saw an increase of $ 50 billion in an hour after the decline in CPI data.
Meanwhile, the Fed’s rate hikes are likely to put pressure on the stock market. This is where the correlation between the crypto market and stocks comes into play. This relationship is likely to have a negative impact on Bitcoin as well. On the other hand, if the Fed slows its action on interest rates, it could make stocks more attractive as an investment. Therefore, it is possible that this will force the crypto markets as well.
According to the forecasts of financial analyst Seth_fin, the CPI data means an inflation increase of 7.4 points with 0.2 variation. Markets expect the FOMC rate hike to be 50 basis points. Seth_fin says it’s ‘suitable for Bitcoin’.
Bitcoin price action
At press time, Bitcoin is trading at $17,254, up 2.48% on a daily basis. The leading crypto saw a 1.79% increase in value on a weekly basis. While BTC was watching below $ 17 thousand during the day, it made a sudden jump in the evening.
With a market cap of $331.7 billion, Bitcoin remains the largest crypto, according to CoinMarketCap data.
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