3 Things That Could Further Influence Crypto Markets in The Week Ahead

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During the early hours of Monday, digital assets experienced extreme fluctuations. Initially, Bitcoin plummeted from approximately $106,000 to under $100,000. However, it quickly rebounded and set a new record high later in the day, surpassing $109,000.

On January 20, all attention will shift towards Donald Trump’s inauguration, as U.S. stock markets take a day off to observe Martin Luther King Jr. Day.

Last week’s surprisingly strong Core Consumer Price Index data helped alleviate inflation concerns, boosting investor sentiment, a trend mirrored in the markets. However, this positive momentum seems to be fading as we enter a new week. Interestingly, despite the recent market fluctuations, the crypto market has bounced back from its losses and reached new highs again.

Economic Events Jan. 20 to 24

On Monday, President-elect Donald Trump is set to take office. Yet, it’s possible that financial markets have already accounted for this eventuality. Nevertheless, as executive orders are promptly signed, we could witness additional fluctuations in the market.

During the weekend, Trump introduced his very own meme-based cryptocurrency (TRUMP). Within hours, its fully diluted market capitalization skyrocketed to more than $70 billion. However, it soon plummeted by 50% in a significant market collapse.

This week is expected to have fewer significant economic updates, starting with the release of initial jobless claims figures on Thursday.

On Friday, we’ll see the preliminary readings for both the S&P Global Manufacturing PMI and Services PMI related to January. This purchasing manager’s index data functions as a forward-looking economic indicator, helping us understand shifts happening in the broader economy.

This coming Friday, we’ll see updates on home sales figures, the Michigan Consumer Confidence Index for January, and forecasts about future inflation rates. These last figures are based on a regular survey that measures consumers’ feelings about their overall confidence and their beliefs about long-term price increases, which in turn influence spending habits.

Key Events This Week:

1. MLK Day, US Markets Closed – Monday

2. Inauguration of President Trump – Monday

3. Initial Jobless Claims data – Thursday

4. S&P Global Manufacturing/Services PMI data – Friday

5. December Existing Home Sales data – Friday

6. ~10% of S&P 500…

— The Kobeissi Letter (@KobeissiLetter) January 19, 2025

Moreover, the European Central Bank’s gathering on Thursday might offer hints regarding possible interest rate reductions in 2025, and these indications could impact worldwide financial markets.

This week has seen the release of several significant earning statements, such as those from Netflix, Charles Schwab, and American Express.

Crypto Markets Going Crazy

To begin the week, the cryptocurrency market experienced a downturn, with approximately $200 billion worth of value exiting the sector. This significant departure caused the total market capitalization to decrease by more than 6%, leaving it at roughly $3.58 trillion.

Initially, Bitcoin experienced a steep decline, dropping back into the five-figure range at approximately $99,700. Yet, within hours, it reversed course, reigniting its bull run and reaching a new record peak of more than $109,000.

Over the last hour or so, alternative cryptocurrencies (altcoins) have experienced heightened price swings, yet they’ve been making notable increases in value recently.

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2025-01-20 10:41