Bitcoin

Bitcoin Faces Crucial US Economic Tests This Week

Published

3 months ago

August 12, 2024

Coin2049 Newsletter

Bitcoin (BTC) faces a big week ahead as various key macroeconomic events are scheduled on the US calendar. The impact of these data releases on the crypto market has regained importance after a period of diminishing influence in the second half of 2023.

Crypto traders and investors should prepare for potential volatility as the week starts, with multiple impactful events lined up on the economic calendar.

Bitcoin Braces for US Economic Data: What to Watch

While the week’s major US economic reports calendar is packed with events, those that could impact Bitcoin and digital assets make the bulk of it. Among them is Donald Trump’s interview with Elon Musk.

Trumps Interview With Musk

Trump will engage Musk on Monday, August 12 via X spaces at 8 p.m. ET. The interview is expected to be unscripted and open to all topics, with Musk inviting everyone to submit questions they would like to see discussed. Musk is pro-Trump, with reports that the CEO of X created a Super PAC focused on supporting candidates who favor a meritocracy and personal freedom.

“Am going to do some system scaling tests tonight & tomorrow in advance of the conversation with Donald Trump,” Musk said on Sunday.

This comment is made given the platform’s spotty performance last year during an interview with Florida Governor Ron DeSantis. Indeed, this interview could have implications for Bitcoin and crypto after Trump’s bullish assertions during the Nashville conference. Both Trump and Musk are pro-crypto, which means the subject will likely spring up in the interview.

Core PPI (Wholesale Inflation)

On Tuesday, the US Bureau of Labor Statistics (BLS) will report July’s Core Producer Price Index (PPI). This data determines price increases at the producer level and influences financial markets by measuring inflation at the wholesale level. Specifically, increases in PPI indicate increases in production costs.

These increases could lead to growing energy and hardware costs requisite for mining and processing cryptocurrencies. A higher core PPI on August 13 could negatively affect Bitcoin and crypto.

Economists forecast a 2.2% year-over-year increase, four-tenths of a percentage point less than in June. The core PPI, which excludes volatile food and energy prices, is seen rising 2.7%, compared with 3% previously.

US CPI

The BLS is also scheduled to release the July Consumer Price Index (CPI) this week. This data measures the price increases in consumer goods and services. While the consensus call is for the CPI to increase 2.9% year over year, the core CPI is expected to rise by 3.2%, with both estimates being one-tenth of a percentage point less than the June figures.

An increase in the CPI may decrease consumers’ purchasing power. This could negatively affect Bitcoin and crypto markets because consumers may tend to spend less when purchasing power decreases.

From another perspective, the decreased purchasing power of fiat currencies could lead to more people turning to alternative assets like crypto. Here, they see it as a means to protect their wealth. In this scenario, an increase in inflation, as indicated by the CPI, would potentially drive up the demand for Bitcoin and crypto in general, ultimately driving up their prices.

Initial Jobs Claims

The Census Bureau will report on the US jobs claims on Thursday, detailing July’s retail and food services sales data. Economists predict a 0.3% month-over-month increase relative to a flat reading in June.

Retail sales could gain 0.1% minus the sale of autos, which is three-tenths of a percentage point less than previously. Amid recession fears that have kept investors spooked recently, the market hopes to see continued resilience in consumer spending.

“Bitcoin and Ethereum tend to underperform during periods that resemble or approach a recession in the United States. Additionally, investors are reducing their positions as prices have fallen below the average entry point for ETF investors, which is approximately $60,000,” Markus Thielen, Founder and CEO at 10x Research, recently told BeInCrypto.

Consumer Sentiment Survey

Markets also brace for the University of Michigan’s August consumer Sentiment survey, which will be released on Friday. This data reflects the gap between the US economy’s continued strength and how households feel about their financial situation.

In July, consumers’ expectations of the year ahead inflation was 2.9%, which signified a near a 3-and-a-half-year low. Expectations for the August 16 release are for a 67.5 reading, about one point higher than previously.

Noteworthy, consumer sentiment is much more sensitive to inflation, while consumer confidence is more sensitive to the labor market. If the data shows consumers still struggle with inflation and high interest rates while worrying more about their jobs, crypto could react differently.

Ultimately, the relationship between crypto and US macroeconomics is not always straightforward. The market reacts to data releases in unexpected ways, which is determined by what transpires in the days leading up to the data release date.

For instance, traders could front-run the data if markets anticipate an increase for specific data. This means the immediate reaction in crypto prices may be different than expected.

Bitcoin Price Outlook

Meanwhile, Bitcoin is back in the $58,000 range after topping out at $61,858 on Sunday. While this volatility could be attributed to low trading volumes on the weekend, this week’s US economic data also has traders and investors on alert.

As BTC retraces to the demand zone, this order block could provide a good buying opportunity. However, this is contingent on the $55,313 level holding as a support floor on the one-day timeframe. Momentum indicators such as the Relative Strength Index (RSI) suggest a lack of conviction among bulls.

Perhaps positive developments from the US macroeconomic front could inspire bullish optimism. This could drive Bitcoin price back up and, with it, the broader cryptocurrency market.

Bitcoin Price Performance — BTC/USDT 1D Chart. Source: TradingView

However, if the $55,313 threshold breaks as support, and the price closes below it on the daily timeframe, Bitcoin could roll over lower, potentially extending for a liquidity sweep below $52,398.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.

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Trump and Lummis Unite on $76 Billion National Bitcoin Reserve

Published

8 hours ago

November 7, 2024

Coin2049 Newsletter

Senator Cynthia Lummis is making a bold new proposal to establish a Bitcoin reserve in the US. This follows President-elect Donald Trump’s recent declarations in the run-up to the US elections.

Her bill, the BITCOIN Act of 2024, aims to have the US Treasury acquire 1 million Bitcoin (BTC) over five years, a massive move that would position the US as a leader in financial innovation.

Senator Cynthia Lummis Advocates Bitcoin Reserve

The Wyoming senator wants the plan spread across five years, with purchases of 200,000 BTC tokens every year to develop America’s Bitcoin reserve. At current rates, that translates to an investment of about $76 billion.

“We are going to build a strategic Bitcoin reserve,” Lummis shared on X (formerly Twitter).

Notably, Lummis’s side of the political divide now holds the majority in both the Senate and House committees. According to Stand With Crypto, 261 pro-crypto candidates have been elected to the House of Representatives against 116 anti-crypto candidates. On the other hand, there are 17 pro-crypto candidates in the Senate and 12 anti-crypto lawmakers.

BTC Price Performance. Source: BeInCrypto

With this, the chances of Senator Lummis’ Bitcoin Bill passing through Congress are far better. This is as opposed to the Biden administration, where efforts toward bipartisan bills were greatly stifled due to a divided Congress.

This political alignment, along with Bitcoin’s recent surge to a new all-time high, adds momentum to Lummis’ initiative. Industry leaders, including Michael Saylor of MicroStrategy and Samson Mow, have shown support, stressing Bitcoin’s potential as a national asset.

Mow highlighted Bitcoin’s value at sub-$100,000, pointing out its potential strategic importance if prices soar above $500,000 in coming years.

“Good luck Senator Lummis. I suggest acting quickly. The difference between acquiring Bitcoin below $0.1 million vs. $0.5 million will have massive geopolitical ramifications,” Mow wrote.

Framework for Secure BTC Management

The BITCOIN Act does not stop at Bitcoin acquisition. It also introduces a framework for managing Bitcoin securely within Treasury vaults. It aims to reduce national debt by half by 2045. This would serve as a hedge against inflation and a potential powerhouse for US debt management.

President-elect Trump publicly endorsed the creation of a national Bitcoin reserve during the Bitcoin 2024 conference in Nashville. His remarks continue to stir interest among crypto proponents and Republicans as the then-presidential aspirant emphasized Bitcoin as a “core of financial independence” for the US.

“It will be the policy of my administration…to keep 100% of all the Bitcoin the US government currently holds or acquires into the future. This will serve in effect as the core of the strategic national bitcoin stockpile…It’s been taken away from you,” Trump said.

Meanwhile, state governments are also eyeing Bitcoin, with Florida’s Chief Financial Officer Jimmy Patronis recently endorsing Bitcoin as a “strategic reserve” for state pensions. Florida’s pension fund, among other states like Wisconsin and Michigan, would benefit from Bitcoin’s long-term appreciation, diversifying investments amid economic uncertainty.

Nevertheless, while the plan has garnered support, it raises questions about economic risks and global impacts. Some economists warn of potential volatility in tying national debt management to cryptocurrency. However, advocates point to Bitcoin’s finite supply and growing international adoption as a hedge against inflation and market fluctuations.

With Trump’s support, a Republican-led Congress, and growing state-level backing, the plan has momentum. This makes the concept of a national Bitcoin reserve a closer reality than ever before. If implemented, the BITCOIN Act could place the US at the forefront of a global financial evolution.

“Other countries will follow,” another popular user on X added.

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Bitcoin Price Might Never Dip Below $70,000 Again After The US Elections, Here’s Why

Published

16 hours ago

November 7, 2024

Coin2049 Newsletter

The US presidential elections have come and gone, and the only thing left is the results. Interestingly, a snapshot of the Bitcoin price during the elections showed Bitcoin trading just above $70,000. This is a notable price to follow, as history shows this might be the price support for Bitcoin in the foreseeable future. Interestingly, this phenomenon goes back to the Bitcoin price levels in previous US elections.

Why Bitcoin Price Might Never Dip Below $70,000 Again

Bitcoin has largely been on an uptrend since Monday, when it kicked off a run after it rebounded to the upside from $67,000. This run continued, allowing the Bitcoin average price during the 2024 presidential elections to be around $70,110.

Historically, U.S. election cycles have often been accompanied by shifts in Bitcoin’s value, marking crucial price points that tend to establish longer-term support levels.

To understand this trend, we need to look at the past four election cycles. Back in 2012, during the early days of the crypto industry, the Bitcoin price traded at a modest $10 on the US presidential election day, a price point that now seems almost unimaginable. By 2016, Bitcoin’s election-day price had climbed to $710, setting a new baseline that it has never revisited since.

The most interesting one was what happened after the 2020 US presidential election, when the Bitcoin price was trading around $13,555. The Bitcoin price has never revisited this price point again since then up until the time of writing. What’s more interesting is that this price point even served as the lowest support level during the 2022 bear market price crash.

If these historical trends are any indication, the 2024 election-day price of $70,110 could become a similar stronghold and a price floor for Bitcoin in the coming years. This level might even serve as critical support should a bear market eventually take hold at any point.

What’s Next For The Bitcoin Price?

As of now, Bitcoin is trading above $73,200 after experiencing an intense surge over the past 24 hours. This remarkable rally saw Bitcoin climb nearly 10% within a single day, reaching an intraday high of $75,358. This milestone has now become Bitcoin’s highest trading level, as it broke past its previous all-time high of $73,737 in March 2024.

Although the Bitcoin price has pulled back slightly likely due to some investors cashing in on recent profits, the rally is expected to resume anytime from now. Considering this momentum, Bitcoin remains well-positioned to challenge the $80,000 mark before the end of November, especially if buying interest continues to drive the current uptrend.

Bitcoin price chart from Tradingview.com — BTC price above $74,000 | Source: BTCUSD on Tradingview.com

Featured image created with Dall.E, chart from Tradingview.com

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Bitcoin

Bitcoin Price After US Presidential Elections: Here’s How BTC Reacted To Previous Winners

Published

2 days ago

November 6, 2024

Coin2049 Newsletter

Market analysts have continued to deliberate on how the Bitcoin price could react to a Donald Trump or Kamala Harris victory in the US presidential elections. History indicates that Bitcoin’s future trajectory is bullish, irrespective of who wins the elections.

How The Bitcoin Price Has Reacted To Previous Winners

The Bitcoin price has always hit a new all-time high (ATH) regardless of the winners in the past US presidential elections. In 2012, after Barack Obama won the elections, Bitcoin rallied and reached a new ATH of $1,200 in 2013. Its price then consolidated until the next election in 2016.

The 2016 US presidential elections, which Donald Trump won, also sparked the beginning of another impressive rally for the Bitcoin price, which rose to a new ATH of $19,000 the following year. In 2020, following Joe Biden’s victory in the US presidential election, BTC rose to a new ATH of $69,000.

The Bitcoin price rally after the US presidential elections is believed to be due to the market certainty that the election aftermath provides. Meanwhile, based on history, the BTC rally could begin as soon as December, with the flagship crypto hitting a new ATH as soon as January 2024.

In 2016, the Bitcoin price rally began about three weeks before the election and went on to hit a new high in the first week of January 2017. In 2020, BTC had also consolidated for about six months before it began to rally from $11,000 just about three weeks before the US elections and then went on to reach a new high of $42,000 in January 2021.

Bitcoin’s recent price action also looks to be playing out the same way as BTC began rallying in mid-October and even came close to hitting its current ATH of $73,700 late last month. As such, there is the possibility that the flagship crypto could again retest this ATH and surpass it as soon as January 2024 or even before then.

There Could Be Some Volatility In The Coming Days

In an X post, Crypto analyst Ali Martinez warned that the days following the last three US presidential elections have been volatile for the Bitcoin price. However, he added that the overall trend has stayed upward.

Economist and crypto analyst Alex Krüger also warned about the potential pullback the Bitcoin price could face after the US elections. He claimed that there is a 45% chance that BTC could drop to as low as $65,000 if Kamala Harris wins the elections.

Due to his pro-crypto stance, Donald Trump looks to be the most preferred candidate in the crypto community. As such, the market could initially react negatively to a Harris win while taking in Trump’s loss.

At the time of writing, the Bitcoin price is trading at around $68,000, down in the last 24 hours, according to data from CoinMarketCap.