Crypto and Financial Markets Hit With Major Events This Week
LUCKNOW (CoinChapter.com) – The cryptocurrency market enters a critical week as major events are on the horizon. Each event has the potential to influence crypto valuations and trading patterns. Among them, the upcoming FOMC meeting is at the forefront of market attention. While analysts expect the central bank to maintain current policy rates, there’s growing anticipation for future cuts. The market has priced in expectations for three rate cuts in 2024.
According to the CME FedWatch Tool, there’s an 89% probability of a 25 basis point rate cut in September. This forecast aligns with recent cooling inflation data, which has also increased bets for additional cuts in November and December. A rate cut or signals of future cuts could boost the crypto market. Lower interest rates typically lead investors to seek higher yields in riskier assets, potentially driving capital into cryptocurrencies. Conversely, if the Fed maintains a hawkish stance, it could temper enthusiasm in the crypto space.
Powell’s Speech Might Be A Make-or-Break Moment
Federal Reserve Chair Jerome Powell’s press conference following the FOMC meeting will be scrutinized for nuances in the Fed’s policy outlook. His comments on inflation, economic growth, and future rate decisions will be pivotal.
Dovish comments from Powell could lead to a rally in crypto markets, as they would suggest a more accommodative monetary policy. On the other hand, hawkish remarks might dampen market sentiment, potentially leading to a sell-off in cryptocurrencies.
US Job Data Scheduled To Be Released
The release of US unemployment data for July, scheduled for August 2, will provide critical insights into the labor market’s health. This data significantly influences the Fed’s policy decisions.
Market estimates project the US unemployment rate to be 190,000 in July, down from 206,000 in June, with the unemployment rate expected to remain steady at 4.1%.
Higher unemployment rates or lower non-farm payroll data typically boost crypto market sentiment. This is because such data might encourage the Fed to adopt a more dovish stance, potentially leading to increased investment in digital assets.
You Might Also Like: US Job Market Slump Could Fuel Bitcoin Prices
Crypto Market Outlook
As these events unfold, the crypto market stands at a crossroads. The potential for rate cuts, coupled with Powell’s remarks and job data, could trigger significant market movements in either direction.
Last week’s positive developments have already set a bullish tone. The SEC’s approval of the US Spot Ethereum ETF and the Bitcoin Conference 2024 in Nashville have bolstered market sentiment. Speakers at the conference provided optimistic outlooks on Bitcoin and shows the US’s increasing focus on the crypto sector.
Above all, the markets remain highly sensitive to macroeconomic factors. A dovish turn from the Fed could fuel a crypto rally, while hawkish signals might lead to a pullback. Moreover, the job data adds another layer of complexity, potentially reinforcing or countering the narrative set by the FOMC and Powell’s speech.
The post Crypto and Financial Markets Hit With Major Events This Week appeared first on CoinChapter.
