A Decisive Week for Cryptocurrency Markets With Economic Turbulence Ahead

5 views 7:36 am 0 Comments December 19, 2023

The upcoming week in the cryptocurrency market unfolds against the backdrop of Bitcoin’s recent struggles to overcome resistance levels of $42K, following a surge prompted by the Federal Reserve’s dovish stance last week. While other altcoins are still navigating these challenges, market participants are gearing up for key economic data releases from the United States, attempting to gauge their potential impact on the crypto sphere.

The Kobeissi Letter highlighted key U.S. economic events starting December 18. These key events present potential catalysts that might influence Bitcoin’s trajectory throughout the year.

Crucial US Economic Updates, Could Be Make-or-Break Events?

Bitcoin may continue to decline if it fails to surpass the $41,800 resistance zone, with immediate support near the $40,600 level or last swing low. As Bitcoin grapples with current resistance, the early part of the week witnesses the disclosure of housing and building data, which is expected to remain stagnant. These releases, slated for Monday and Tuesday, may not significantly sway crypto markets but are integral economic indicators that reflect broader market sentiment.

But wait for a crucial event on Wednesday that involves the release of the Q3 GDP Growth Annualized report, expected to provide insights into the health of the US economy during the past quarter. Analysts project it to echo Q2’s 5.2% expansion rate, offering critical clues about economic stability and growth momentum.

The blockbuster Thursday will bring on key reports, including initial jobless claims, the Philadelphia Fed manufacturing survey, and leading economic indicators. These releases serve as key benchmarks, offering comprehensive insights into the current economic landscape.

Friday’s focus centers will be on November’s Core Personal Consumption Expenditures (PCE), a crucial metric monitored by policymakers for its implications on inflation. Predictions suggest a decline to 3.2%, signifying potential shifts in consumer spending and inflation trends.

Limited Market Impact, How’s Altcoin Reacting? 

Current market sentiments are prevailing towards a mixed reaction from the investors and major atcoins saw limited action. However, Monday’s Asian trading session saw a notable 2.5% decline in total crypto market capitalization, amounting to $1.61 trillion. This dip follows a significant contraction of $100 billion from its peak earlier in the month, reflecting the market’s ongoing volatility and adjustment.

Bitcoin’s recent decline of 2.3% to $40,963, which was notably followed by 37000 Bitcoin options expiry, contributes to the broader market sentiment. 

Other altcoins such as Solana, Cardano, Avalanche, Polkadot, and Shiba Inu faced even more significant losses, each dropping over 5%. These market movements suggest a volatile trajectory, indicating potential shifts in investor sentiment and market dynamics amid ongoing economic evaluations.