Top Crypto Market Events This Week: Bulls vs Bears?
The week of September 1st for the Crypto Market is one filled with economic, employment, geopolitical and regulatory catalyst events. Bitcoin traded up around $78,600. Ethereum traded near $2,440 and XRP traded around $1.37. The total market cap for crypto was around $2.64 trillion and CoinMarketCap’s Fear and Greed Index was at 75, meaning investors have high spirits. There is a lot of important data coming out this week that has the potential to fuel the market or put a halt on the bulls.
ISM Manufacturing PMI and JOLTS Jobs Data
The first major event is the U.S. ISM Manufacturing PMI (Purchasing Managers Index) which is predicted to fall to 55.1 from its previous report at 55.6. At the same time, the JOLTS Job Openings data report is expected to fall to 7.4 million. Both reports come out at 10:00 a.m. ET.
If the data is stronger than expected, it has the potential of higher Treasury yields and in turn a stronger dollar. Bitcoin and other risk assets will be pressured by this. Contrarily, weaker data will support expectations of monetary policy easing.
ADP Jobs Report and Federal Reserve Beige Book Wednesday brings the ADP employment report and the Beige Book
Thursday, along with a series of other data releases such as the services activity report and jobless claims, will have a lot of weight in what future expectations are for monetary policy. This in turn will influence the crypto markets.
US Nonfarm Payrolls and Unemployment Rate
Since the release of this report sets the tone for the Federal Reserve’s upcoming meeting from September 15-16, the most important data release of the week is the U.S. Nonfarm Payrolls report.
Economists are projecting an addition of around 50,000 jobs this month, following a surprising loss of 23,000 jobs last month. The unemployment rate is expected to hold steady at 4.1%, and average hourly earnings will provide more information regarding the headwinds on inflation.
A stronger than expected labor report would help justify a hawkish stance from the Federal Reserve, which in turn would weigh on crypto. A weaker than expected labor report might support Bitcoin as investors would see that as easing the pressure for tighter monetary policy. However, extremely weak labor data might provide the market with the narrative to sell off all risk assets.
US-Iran Tensions Add Geopolitical Risk
Rising U.S.-Iran tensions provide volatility as a new source of risk. Market fears are heightening from the threats along the Strait of Hormuz which have pushed prices on Brent crude above $90 with a fear of inflation with energy prices returning.
An inflationary environment made worse with higher oil prices would compromise the ease of monetaric policy and likely reduce demand for riskier assets, like cryptocurrencies, further.
CLARITY Act Developments and Crypto Regulation
During the lead up to the September 15 Senate cloture vote on the Digital Asset Market CLARITY Act,Regulatory uncertainty will remain. The Act requires 60 votes to proceed to debate, and progress would provide more defined guidelines for markets and increase institutional confidence. Stagnation or failure would prolong this regulatory uncertainty.
Are Cryptos More Bullish than Bearish Now?
Currently, the crypto market seems optimistic with bitcoin prices hovering around $78,600 and the Fear and Greed index at 75. The markets seem bullish. However, there are concerns that could create volatility such as employment, inflation data, geopolitical tensions and the state of the regulations.
For bulls, weaker economic data combined with more positive regulations show potential for another bullish trend for crypto. However, stronger economic data, higher oil costs, increases in bond yields and higher geopolitical tension would put more selling pressure on the markets.
