The world of cryptocurrencies is always on the move, but next week will be particularly volatile for the digital currency market. Several key events and reports are expected to be released from leading institutions, which will significantly impact the crypto sphere. Investors need to be prepared for the chaos ahead, as the market’s behaviour is expected to be hugely impacted by these events.
Here are some dates to save, as we gear up for what promises to be a critical week for cryptocurrencies and the wider digital currency market.
Monday, May 17, 2021 – Tesla Update on Bitcoin Holdings:
Tesla’s CEO, Elon Musk, announced in February that the company had bought $1.5 billion of Bitcoin, and it has been revealed that the vehicle manufacturer has been selling off parts of its holdings lately. On May 17th, Tesla is set to report its Q1 earnings, which will likely include an update on its Bitcoin holdings.
The cryptocurrency market will be keeping a close eye on Tesla’s statement, as they look to gauge the overall sentiment of the market towards Bitcoin’s future. If Tesla announces further selling of its holdings, it could spark a massive sell-off of Bitcoin, leading to a further drop in its value, and thereby affecting other cryptocurrencies as well.
Thursday, May 20, 2021 – Chinese Central Bank’s Digital Yuan:
China has been the leading nation when it comes to Central Bank Digital Currencies (CBDCs), with their digital yuan project already tested in several Chinese cities. On May 20th, the Chinese central bank is set to present its annual financial stability report, which is expected to provide updates on the country’s CBDC plans.
China’s digital yuan is sure to be a game-changer in the cryptocurrency space, as it will be the first major global economy to launch a CBDC. The market’s reaction could be either positive or negative, depending on how effectively the digital yuan is implemented in the country, as well as China’s overall stance on the use of cryptocurrencies.
Saturday, May 22, 2021 – FOMC Will Meet Soon:
The US Federal Reserve’s Federal Open Market Committee (FOMC) is set to meet on June 16 to 17 2021, to discuss monetary policy decisions. Ahead of this meeting, several FOMC members are expected to make various speeches discussing the economy, inflation data, and interest rate policy.
The FOMC meeting will be essential to shareholders and investors, as it’s expected to announce the change in monetary policy, which will have a significant impact on the stock and cryptocurrency markets. A more hawkish stance on interest rate policy will lead to a stock market slump and negatively impact the cryptocurrency market.
Conclusion:
The cryptocurrency market is highly volatile, and investors need to understand the implications of each event on the market. Tesla’s update on Bitcoin holdings, Chinese Central Bank’s Digital Yuan announcement, and FOMC meetings are expected to have significant impacts on the market. These dates should be noted on your calendar, as it’s crucial to keep up with the financial and investment markets’ latest news and trends to make informed decisions. Brace yourself, as it’s going to be a nail-biting week for cryptocurrency investors.
The Bitcoin and crypto market have been experiencing a stronger correction since last Wednesday, rattling the bullish sentiment of the past few weeks. While the 1-week chart of Bitcoin still looks very bullish as long as the price stays above $25,000, the market is near the critical area in the 1-day chart.
Any divergence below $26,800 could mean a trend change on a daily basis. On the upside, the $27,800 area is of key importance. If this level is breached, the uptrend could resume sooner than expected by the bears. In the week ahead, several events and data are in place that could determine a trend direction.
Tomorrow, Tuesday, April 25, the Conference Board will publish the latest US consumer confidence figures for March at 10:00am EST. In the previous month, consumer confidence came in at 104.2, well above expectations of 101.0.
In recent months, strong consumer data has been viewed positively by the crypto market. Therefore, a beat on expectations should have a slight positive impact on Bitcoin. Weak consumer confidence could be an indication of an impending recession and accordingly mean a widening correction in the crypto market.
On Thursday, April 27, US gross domestic product (GDP) figures for the first quarter of trade in 2023 will be released in advance at 8:30am EST. Recently, the weak data led to a price correction in both the stock market and the crypto market.
The initial estimate for GDP is 2.0%, well below the final data for the fourth quarter of 2022 (2.6%). If the forecast is confirmed, the financial market is likely to trend downwards for fear of an approaching recession. Exceeding the estimate, on the other hand, could trigger bullish momentum for Bitcoin and crypto.
However, the most crucial macro data point comes at the end of the week. On Friday, April 28 at 8:30 am (EST), the Bureau of Economic Analysis will publish core personal consumption expenditures (PCE) for March.
February’s core PCE was +0.3% on a monthly basis, below the forecast of +0.4%. For March, analysts expect an unchanged +0.3% increase. On an annualized basis (YoY), the forecast is for a 4.5% increase, down from 4.6% last month (forecast: 4.7%)
If core PCE turns out higher, it will be bearish and likely weigh on the crypto market. On the other hand, if the core inflation rate increased less, as in the previous month, a bullish reaction can be expected. The Bitcoin price is expected to benefit from continued falling inflation rates.
Meanwhile, crypto podcaster Tony Edwards issued another warning. According to him, the biggest crypto critic in all of Washington DC, Elizabeth Warren, could present an anti-crypto law that supposedly has no chance of success, but could still shock the market for the time being.
At press time, the Bitcoin price stood at $27,669, struggling to break the resistance zone around $28,800.
