The flagship cryptocurrency, Bitcoinis currently flying high thanks to the pending approval Discover Bitcoin ETF applications in January. However, this uptrend could cool off as this prominent crypto analysis platform outlines the key events that will take place this week.
“Big week ahead” for Bitcoin
In a after The Kobeissi Letter, shared on their Specifically, it will be released on December 12th. Meanwhile, The Federal Open Market Committee (FOMC) meets on December 12 and 13.
These two events are important for the price of Bitcoin. CPI inflation data typically plays a role in the FOMC’s decision on whether to raise interest rates to combat inflation. A dovish stance is seen as bullish for the markets (including Bitcoin), while an aggressive stance is seen as bullish generally has a negative impact on the market.
Therefore, all eyes will be on the inflation data and whether or not the FOMC will choose to raise rates. Federal Reserve Chairman Jerome Powell did recently declared that talks about interest rate cuts are still “premature,” although he admitted that “inflation is moving in the right direction.”
Financial markets reacted positively to Powell’s comments, with many experts believing the Fed is raising interest rates and possibly sticking with current interest rates between 5.25 and 5.50 percent. If that happens, there’s a good chance it will The price of Bitcoin will respond positively to it.
BTC price recovers above $42,000 | Source: BTCUSD on Tradingview.com
Other inflation indicators to watch out for
The OPEC monthly report and November’s Producer Price Index (PPI) inflation data will also be released on December 13. These two events are also known to have a significant effect on the price of Bitcoin as these are key inflation indicators.
First, OPEC’s monthly report contains issues affecting the world oil market. It will also show whether there has been a significant increase in oil prices and the key measure of supply and demand. A rise in oil prices could be bad news for Bitcoin as it would mean inflation is still high, which could lead to higher interest rates.
The PPI inflation data is also the key. Some even argue that these are more important than CPI inflation data because producers indirectly determine how much consumers pay for these goods. An increase in PPI inflation data also indicates that inflation is high. That would also be a factor when the Fed decides whether or not to raise rates.
At the time of writing, Bitcoin is trading around $42,100, down more than 3% facts from CoinMarketCap.
Featured image from The Conversation, chart from Tradingview.com