- Traders are cautious ahead of key economic decisions from the FOMC, ECB, and U.S. data.
- FOMC, ECB interest rate decisions, and U.S. GDP data are expected to shape market sentiment.
- Market direction hinges on upcoming economic reports, especially interest rate decisions.
Despite several positive notes in the cryptocurrency market, Bitcoin is currently in the red at the onset of this new week. As of press time, Bitcoin is at around $99,356, a 5.12% drop from its Sunday high of approximately $105,500. The drop comes from traders preparing for the upcoming global economic events that can affect the market.
Key Economic Decisions
The market is in the red today as traders await the decisions of the Federal Open Market Committee, the European Central Bank, and the US government. The FOMC is expected to unveil its interest rate decision on January 28-29, and the ECB will deliver it on January 29-30. Also, the U.S. will release the fourth-quarter GDP and December’s Personal Consumption Expenditures (PCE) later in the week. Such reports are expected to influence investors’ perceptions in the coming days.
The price of Bitcoin shows that investors are better off being cautious and booking profits before such economic events. Trading Economics has predicted that the FOMC and ECB will not change interest rates in the near future as both central banks aim to achieve 2% inflation.
The U.S. Core PCE index, due on January 31, will also play a major role in market perception. Economists expect the index to rise to 0.2%, which means that the Federal Reserve will have a reason to stick to its decision to maintain or even increase rates.
U.S. Q4 GDP Growth Report
This week’s more important event is the publication of the preliminary estimate of US GDP growth in the fourth quarter of 2024 on January 30. If GDP indicates robust growth, it will send a positive signal to markets that are currently worried about slowing down and increasing investors’ confidence. Nevertheless, if the report does not meet the anticipated results, the risk sentiment may turn bearish and affect the Bitcoin price as investors move to safety.
Related: Kraken Donates $111K in BTC to Silk Road Founder Ulbricht
BlackRock CEO Larry Fink shared his thoughts on the economic future during a panel at the World Economic Forum in Davos on January 24th. Fink pointed out that, given the stability of the US economy, we can hardly rule out the possibility that the Federal Reserve will increase interest rates in the near future.
Bitcoin’s direction in the next week will be determined primarily by the decisions made at the FOMC and ECB and by the U.S. economic data. While these announcements are being made, the price of Bitcoin may continue to fluctuate, influencing other markets.
