As a seasoned crypto investor who has weathered multiple market cycles, I find myself bracing for another storm this week. The upcoming economic events and central bank decisions have traditionally had a significant impact on the cryptocurrency markets, and this time seems no different.
It’s generally anticipated that the Federal Reserve, the U.S. central bank, might reduce interest rates this coming week. What’s less clear is if they will go for a minor or significant decrease in rates.
Decisions regarding interest rates will be made in countries such as the UK, Brazil, Norway, Turkey, and South Africa. Additionally, the central banks of Japan and China will be in focus, with announcements anticipated along with their decisions in Taiwan and Indonesia.
This morning, the crypto market has been experiencing a significant pullback, erasing the advance made over the weekend.
Economic Events Sept. 16 to 20
As a crypto investor, I’m eagerly anticipating Tuesday, when we’ll get a glimpse into August’s Retail Sales Report. This vital piece of information sheds light on the spending habits of consumers, specifically their purchases of both long-lasting (durable) and short-lived (non-durable) goods.
As a crypto investor, I find this data invaluable, as it sheds light on consumer spending patterns, acting as a precursor for the ongoing quarter’s economic expansion. Furthermore, it helps me gauge the impact of inflation on the economy.
On Tuesday, we’ll receive the August report on industrial production as well. This data showcases the output levels in various U.S. sectors including manufacturing, mining, and utilities. While these industries account for a relatively smaller proportion of overall economic activity compared to service-based industries, they can still serve as significant indicators of performance.
On Wednesday, September 18th, the much-awaited Federal Reserve’s interest rate decision and press conference will take place.
According to the CME Fed Watch tool, there’s a 41% likelihood of a 0.25 percentage point decrease in interest rates, and a 59% probability of a more significant 0.50 percentage point reduction. This could potentially bring rates down from their current 5.5% to around 5%.
Key Events This Week:
1. August Retail Sales data – Tuesday
2. August Building Permits data – Wednesday
3. Fed Interest Rate Decision – Wednesday
4. Fed Press Conference – Wednesday
5. Philly Fed Manufacturing Index – Thursday
6. August Existing Home Sales data – Thursday…
— The Kobeissi Letter (@KobeissiLetter) September 15, 2024
In simpler terms, Martin Whetton, the Chief of Financial Markets Strategy at Westpac Banking Corp. in Australia, said to Bloomberg that it’s likely there will be a reduction in interest rates (dovish cut) considering the recent data trends and the current policy position. This prediction should be reflected in future market pricing, he added.
Asian markets began trading tentatively on Monday, anticipating a series of economic data releases and central bank decisions due this week. These events may significantly influence market trends not only for the remainder of the year but also into the opening months of 2025.
Crypto Market Outlook
On Monday morning, cryptocurrency markets showed a downward trend once more, causing the total market capitalization to decrease by 4.3%, reaching approximately $2.12 trillion. This decline erased all the growth achieved over the weekend.
On Sunday, Bitcoin saw a 3% drop, sliding from over $60,000 to under $58,500 by Monday morning. There’s a strong possibility it will persist, potentially finding support around the $58,000 mark.
At the time of writing, Ethereum experienced a significant drop of approximately 6%, falling to $2,275 – this is its lowest point in more than a week.
In simpler terms, the alternative cryptocurrencies (altcoins) were acting predictably, imitating each other and selling off rapidly, creating a wave of red (indicating loss) that engulfed the top 20 cryptocurrencies.
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2024-09-16 10:27