Stuck on the edge of $20,000 for several days, many observers are expecting a powerful move in Bitcoin and the crypto market in the coming days or weeks. Whether they are bullish or bearish, this movement may be strongly related to macroeconomic variables.
Back to the recent price of Bitcoin!
For Bitcoin traders, it has been a complete bore for several weeks. Volumes are very low and volatility is almost absent, as shown in the chart below, taken from the Tradingview platform that shows the final weekly Bitcoin data:
Over the past 4 weeks, Bitcoin candles almost flat. As for the price of Bitcoin, this all translates into green below the $20,000 zone. At the time of writing these lines, the price of the mother of cryptocurrencies is even flirting with 19,000 dollars.
Figures inflated as a justice of the peace!
A few hours before the publication of US inflation figures, risk markets are holding their breath. And the crypto market in the first place. For the September figures to be published, the consensus inflation rate of 8.1% year on year is expected. If confirmed, the United States would record its third consecutive month of decline.
US inflation figures, year on year for the last 12 months.
When the August 2022 figures were last released, despite the 12-month rolling decline, the market still allowed negative risk assets. Why? Because despite the reduction, the inflation level is still above forecasts. As for the September figures, the equation is therefore simple. An announcement of a rate below 8.1% would likely send the crypto market higher. Conversely, if inflation were to exceed this threshold, the market could allow sanctions again. Even worse, if inflation exceeded 8.3% last August.
The key inflation figures will also play a decisive role in the price of Bitcoin. And for the first time since last March, the rate went up from 5.9% in July to 6.3% in August. For this indicator, the general consensus is at 6.1% in the September figures. Some analysts believe that the second month in a row above catastrophic forecasts for Bitcoin and the crypto market. With the return risk of 15,000 dollars.
Good to know: Core inflation is an indicator from which certain volatile elements such as raw materials, whether agricultural or energy, are subtracted.
What about prime interest rates?
More than measuring the inflation rate, the market is also waiting for a signal from the central banks and especially from the Fed. And it is clear that the expected sign the slowdown in the rise in interest rates.
According to estimates, the next FED meeting on 2 November should see key interest rates rise between 375 and 400 basis points. In any case, this is about 83% of the economic players questioned. Currently, the rates are around 300 to 325 points.
The data for the next meeting does not reflect a true consensus. For about half of the respondents, the increase would be more modest than recent increases. One thing is certain, the publication of inflation figures will allow the FED to adjust its rate policy. And to note that if it is true, due to the measures implemented it is possible to reduce the inflationary blow. But the real reversal and return to the uptrend seems to be only a correlation with an inversion of the yield curve. For that, we will probably have to wait a few more months.
Resurfacing of geopolitics!
In recent weeks, the Russian-Ukraine conflict has returned to center stage as an explanatory variable for volatility in risk markets. If today this parameter is largely in place of monetary policies, it is clear that it could play its role on the price of Bitcoin and on the crypto market as a whole.
An increase in the tension between the two camps could generate more uncertainty in the markets. And therefore play unfavorably on Bitcoin and altcoins.
