The cryptocurrency market is gearing up for a pivotal week marked by key events that could drive investor sentiment and market course. While Bitcoin recently reached an all-time high, expectations are rising as key inflation data and various developments emerge. These events, ranging from FED announcements to blockchain upgrades, are expected to affect market dynamics in the coming days. Here are the details…
FED wind in the cryptocurrency market
Meanwhile, inflation data remains weighty after FED Chairman Jerome Powell’s statement hinting at possible interest rate cuts, but the timing remains uncertain, increasing the debate in the crypto market. Powell’s comments to the Senate Banking Committee suggest that rate cuts could come soon if inflation is sustainable at 2%.
Market expectations are shifting from early-year predictions of multiple outages to a first outage forecast in June, reaching an overall decline of one percentage point by the end of 2024. In addition, Powell emphasizes that a recession should be avoided by taking a cautious approach to normalizing policies while the economy recovers.
US Consumer Price Index (CPI) and PPI are taken
US Consumer Price Index (CPI) data for February, which is vital for the FED’s inflation assessment, is planned to be announced on March 12. As annual CPI inflation fell to 3.1% in January, crypto market investors are particularly awaiting predictions regarding the Fed’s future policy.
Additionally, annual core inflation remained stable at 3.9% in January, above expectations. Although there is a cooling trend in January compared to December, CPI continues to remain above the Fed’s 2% target, indicating that inflationary pressure continues in the economy.
The US Producer Price Index (PPI), which will affect the Fed’s possible interest rate cut decisions, will be announced on Thursday, March 14. In January, PPI increased by 0.3%, marking the largest increase since August 2023. On the other hand, Core PPI excluding food and energy increased by 0.5%, exceeding Wall Street’s expectations. Considering this, February CPI and PPI data will be closely watched by crypto market enthusiasts for the Fed’s potential move regarding its upcoming interest rate cut plans.
Ethereum Dencun upgrade
Crypto market investors are optimistic as Ethereum’s highly anticipated Dencun upgrade arrives on March 13. The upgrade promises to reduce transaction costs on layer-2 networks, which is expected to increase activity and attract mainstream interest. While a possible rise in Ethereum prices is observed after the upgrade, expectations are high among crypto market investors in an environment of increasing uncertainty in the market. Additionally, optimism regarding the Ethereum price is also increasing in anticipation of the SEC’s Ethereum ETF approval.
FED BTFP is also on the list
Additionally, with March 2024 marking the end of the Fed’s BTFP, a critical plan to stabilize the US banking sector, the anxiety of crypto market investors is growing. Launched in response to bank failures, it expires on March 12, raising concerns about its liquidity impact and potential effects on cryptocurrency prices.
In particular, the program launched amid pandemic uncertainties aimed to eliminate the effects of bank failures and interest rate increases and signaled a crucial moment for market stability.
There will be a cryptocurrency meeting for FTX
FTX Digital raised expectations in the crypto market by holding its inaugural meeting with both customer and non-customer creditors on March 15. The outcomes of the negotiations are important for the crypto space and potentially impact investor sentiment and market stability.
In a week full of major developments, the crypto market is bracing for the impact of key inflation data that is poised to influence the Federal Reserve’s interest rate decisions. Amidst this expectation, there is optimism about the Ethereum Dencun upgrade, which is expected to increase scalability and reduce transaction costs.
Additionally, market participants remain cautious as liquidation concerns intensify with the expiration of the Fed’s BTFP. As investors navigate this dynamic environment, attention will be focused on the intersection of macroeconomic indicators, technological developments and regulatory changes that will shape the course of the crypto market in the coming weeks.
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