The influence of US economic data on cryptocurrencies and Bitcoin (BTC) in particular continues to become apparent, as investors perceive the pioneer crypto as a flight to safety during times of economic uncertainty.

Therefore, crypto traders and investors must brace for possible impact, with three US macroeconomic data releases this week likely to influence volatility for digital assets.

Initial Jobless Claims

Amidst concerns of climate-related catastrophes, unemployment figures have been explosive in October, recording levels last since August 2023. This data, recoding weekly unemployment figures for the week ending October 19, is due for release on Thursday. It will show the number of people who filed for unemployment last week.

With a median forecast of 250,000 on MarketWatch, these unemployment figures are expected to be high amidst storm damages and labor stoppages. Specifically, economists’ consensus estimate is that the initial jobless claims will come in elevated at around 245,000. This is because some residents were still without power last week in states affected by Hurricanes.

A higher-than-expected unemployment figure could indicate a weakening job market in the aftermath of these natural disasters. It may also affect sentiment toward the Fed’s rate plan. The agency has a dual mandate—to achieve price stability and maximum employment. Fed officials recently said they would prioritize the labor market due to inflation cooling.

Read more: How to Protect Yourself From Inflation Using Cryptocurrency.

Therefore, higher jobless claims could renew hopes for a larger interest rate cut, possibly supporting Bitcoin.  On the other hand, a lower-than-expected number of jobless claims could indicate a strengthening economy. This would boost investor confidence and potentially drive up demand for riskier assets like Bitcoin.

US Manufacturing PMI

This data, due for release on Thursday, October 24, will provide insights into the health of the manufacturing sector. As one of the interest rate-sensitive sectors, the manufacturing industry may be poised to benefit from the easing cycle. Economists forecast recovery in manufacturing, boosting earnings growth for the S&P 500 into 2025.

However, with a previous reading of 47.3, the manufacturing PMI is expected to rise slightly to 47.5. Nevertheless, anything below 50 indicates a contraction in manufacturing and a negative outlook for manufacturers. The index has been negative for 22 of the last 23 months, indicating a longer negative streak than the great recession of 08- 09.

A PMI reading above 50 would suggest expansion in the manufacturing sector, which could be interpreted as positive for the overall economy. This could lead to increased interest in cryptocurrencies as a hedge against inflation.

US Services PMI

Like the Manufacturing PMI, the Services Purchasing Managers’ Index (PMI) will also provide insights into the health of the services sector. The Services PMI is expected to dip slightly to 55 after a previous reading of 55.2.

Given crypto’s blossoming relationship with macroeconomic trends, investors will be closely monitoring these economic indicators for clues on future price movements. A positive outcome from the jobless claims and PMI data could bolster sentiment and fuel further upside in Bitcoin and other digital assets.

Nevertheless, this week on the US economic data calendar is rather quiet, with all the above macro reports coming in on the same day. Against this backdrop, Neil Sethi, Managing Partner at Sethi Associates, urges investors to take advantage of the light releases this week as next week could bring even more volatility.

“Do note, what this week lacks in key reports next week makes up for and then some. We will get all of the key October employment reports, including the first read on Q3 GDP & ECI (plus Sept personal income and spending with PCE prices). This is on top of most of the Magnificent 7 earnings, the Treasury borrowing announcement, etc. So take full advantage of the light week,” Sethi wrote.

Read more: How To Buy Bitcoin (BTC) and Everything You Need To Know

BeInCrypto data shows Bitcoin is trading for $69,026 as of this writing, up by a modest 1.15% since Monday’s session opened.

Following a market rebound on Friday, Bitcoin (BTC)  has since shown little price movement gaining by only 0.42% in the last day. The premier cryptocurrency currently hovers around $63,000 as investors continue to await the traditional bullish surge of  “Uptober”.  Commenting on BTC’s potential next movement, CryptoQuant analyst ShayanBTC has highlighted key price levels investors should look out for.

Bitcoin Must Overcome Major Resistance To Prevent Crash To $55,000 

In a Quictake post on Saturday, ShayanBTC shared key insights on the relationship between Bitcoin’s Realized Price Unspent Transaction Output (UTXO) Age Bands and potential market trends. Generally, the Realized Price UTXO Age Bands is an on-chain metric that provides insights into Bitcoin holders’ behavior. Specifically, it reveals the average price at which certain categories of BTC investors acquired their tokens.

According to ShayanBTC, the realized price for short-term holders of Bitcoin i.e. holders of BTC for three to six months, currently lies at $64,000 while long-term holders of Bitcoin i.e. for 6-12 months presently have a realized price of $55,000. The analyst explains that realized price levels usually serve as strong support as key support or resistance levels in the BTC market. This is usually because they represent the average cost basis for Bitcoin holders and often form psychological price points.

Based on BTC’s current price of around $63,000, the short-term holders’ realized price of $64,000 presents a pivotal resistance level, a triumphant breakout above which signals would indicate the continuation of the asset’s present upward trajectory. However, if BTC fails to break past $64,000 perhaps due to increased selling activity or macroeconomic factors, Shayan expects the asset to fall to around $55,000 i.e. the realized price level for long-term holders. 

Interestingly, Shayan’s observations are well reflected on Bitcoin’s daily chart where the premier cryptocurrency has consistently oscillated between $55,000 – $65,000 over the last two months. Should BTC break out of this range-bound pattern, it will need to surpass the resistance at $70,000, which could signal the start of a market bull run.

BTC Network Fees Up By 32%

In other news,  Bitcoin recorded $5 million in network fees, representing a 32.4% rise over the last week. According to on-chain analytics company, IntoTheBlock, this development indicates a heightened network activity despite calming market volatility.

At the time of writing, the crypto market leader trades at $62,786 reflecting gains of 2.13% and 9.08% in the last seven and thirty days respectively. Meanwhile, BTC’s daily trading volume is currently valued at $17.57 billion, following a 42.92% decline.

Featured image from The Economic Times, chart from Tradingview 

The Bitcoin vs Dollar debate has been a favorite topic among financial analysts, crypto enthusiasts, and the general investing public. As Bitcoin continues its erratic price action, even briefly hitting over $70k last March 2024, the question remains as relevant as ever. So, is Bitcoin a better store of value and hedge against inflation?

If we ask the experts, many agree that Bitcoin is far better than the US dollar and other fiat currencies. According to Anthony Pompliano of Professional Capital Management, Bitcoin is better since fiat currencies are more volatile, and it simplifies many investing principles.

Pompliano Pushes For Bitcoin

In a Fox News interview, Pompliano shared his thoughts on the ongoing Bitcoin-dollar debate. He said Bitcoin is in a better position since fiat currencies are more volatile, and the public is faced with its diminishing purchasing power.

Pompliano believes that Wall Street and the rest of traditional finance failed to see Bitcoin’s value. At the heart of Bitcoin’s advantage is the classic economic problem of scarcity— only 21 million Bitcoins are available, a scarce asset compared to fiat currencies that central banks can continue to print and issue.

Pompliano’s interview and continued debates come with a growing institutional interest in Bitcoin. After the US Securities and Exchange Commission (SEC) approved spot BTC ETFs on January 10th, 2024, there has been a growing interest and inflow of money into these funds. Months after the approval of the first 11 funds, interest in Bitcoin ETFs continues, helping boost the crypto’s price.

Bitcoin Vs Dollar: Anthony Pompliano Explains Why BTC Is Better Than Fiat Currencieshttps://t.co/1sG1aad8OX

— John Morgan (@johnmorganFL) October 20, 2024

Bitcoin: A Simple Yet Scarce Commodity

According to Pompliano, Bitcoin’s appeal and value lie in its simplicity of investing principles. Since there is a limited supply of Bitcoin, this can impact its future market value. Also, a problem for many traders and investors, according to Pompliano, is that they’re too focused on complex financial products like leverage and trading.

The problem with these complex yet popular instruments is that you must track prices and trade at the right time. However, with Bitcoin, users just need to buy and hold. In short, Bitcoin offers a long-term appreciation in value and a better hedge against inflation.

Deutsche Bank Analyst Sees BTC As ‘Digital Gold’

Bitcoin has been getting plenty of support from financial analysts. According to Marion Laboure, an analyst at Deutsche Bank Research, it can potentially become our ‘21st-century gold’. Laboure says Bitcoin’s and the cryptos’ market cap of over $1 trillion is too big to ignore.

Laboure adds that Bitcoin will continue to grow soon as a viable payment alternative, while fiat currencies’ share in transactions will fall. She adds that Bitcoin is a ‘digital gold,’ Ether, the second most popular coin, can be our next ‘digital silver.’

Featured image from Pexels, chart from TradingView