4 US Economic Data With Crypto Market Implications This Week
2025-02-10
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Crypto markets brace for four important US economic events this week, starting Wednesday, February 12. These macroeconomic events could affect the portfolios of Bitcoin BTCUSD holders, making it imperative for investors to adjust their trading strategies.
The influence of US economic events on Bitcoin and crypto generally is progressively resurfacing after a dried-up period in 2023.
CPI
The January CPI (Consumer Price Index) report on Wednesday starts the list of US economic data with crypto implications this week. It comes after December’s CPI rate was slightly increased to 2.9% year-over-year (YoY). Meanwhile, the core rate decreased to 3.2%.
In the latest meeting, the Fed kept its main interest rate steady at 4.25%- 4.50%. They articulated the need for continuous improvement in inflation before considering reducing rates. Forecasts from Cleveland Fed’s Inflation Nowcasting model suggest the main CPI rate will come in at 2.85%, representing a modest drop of 0.5%. They also predict the core rate to have slightly decreased to 3.13%.
Beyond US inflation figures, crypto markets will also be keen to hear remarks from Federal Reserve (Fed) Chair Jerome Powell. His testimony is expected to play a crucial role in deciding the direction of US interest rates. What he says about US President Donald Trump’s tariffs will be of significant interest.
BeInCrypto recently reported that the Fed is already concerned about Trump’s policies, prompting their measured rate-cut strategy.
“Many participants suggested that a variety of factors underlined the need for a careful approach to monetary policy decisions over coming quarters,” the December minutes indicated.
The US CPI data could affect risk-on assets like Bitcoin. High inflation would suggest a hawkish Federal Reserve stance, which could decrease the value of risk-on assets like Bitcoin in the short term. Higher interest rates can make traditional investments more attractive.
On the other hand, if CPI data shows lower-than-expected inflation, it may indicate a more dovish stance from the Fed. This would be positive for Bitcoin. Lower inflation rates could increase demand for Bitcoin as investors seek alternative investments to protect their wealth.
Initial Jobless Claims
On Thursday, the US Department of Labor (DoL) will release its weekly jobless claims report, which will shed light on the health of the US labor market. This US economic data indicates the number of people who filed for unemployment insurance last week, providing a snapshot of the labor market’s performance.
The previous initial jobless claims data came in at 219,000 for the week ending February 1. Lower-than-expected claims suggest continued job market strength, potentially signaling steady consumer spending and a resilient economy.
However, such strength might prompt the Fed to consider raising interest rates, which could boost the USD but weigh on Bitcoin.
PPI
Also, on Thursday, the US PPI (Producer Price Index) data will be out, offering insight into inflation at the producer level. It also provides early signals about future consumer prices and can influence investor sentiment.
The US Bureau of Labor Statistics (BLS) report could have crypto implications. This week’s US PPI report will disclose January’s producer-level inflation, with a median forecast of 0.3%. December’s data came in at 0.2% PPI, indicating that inflationary pressures were easing.
A higher-than-expected US PPI reading may indicate increasing production costs, leading to higher consumer prices. Investors may turn to assets like Bitcoin as a hedge against inflation, driving up demand and prices.
Positive or negative surprises in the US PPI data can also influence market sentiment and risk appetite. If the PPI shows rising inflation, investors may seek alternative assets like Bitcoin as a store of value or haven asset.
Conversely, lower-than-expected PPI figures could lead to risk-on sentiment in traditional markets, potentially influencing demand for cryptocurrencies.
Another perspective is the correlation between crypto and traditional markets. If rising PPI leads to a sell-off in equities, some investors may reallocate their capital to Bitcoin and other digital assets.
“CPI and PPI are coming in, but also a strong week for Crypto seems to be on the horizon. This week is comparable to any previous crisis period. During crisis periods, you’d want to be bullish, and max pain is upwards, not down,” crypto analyst Michaël van de Poppe urged.
Retail Sales
US retail sales data provides valuable insights into consumer spending patterns, economic growth, and overall market sentiment. If Friday’s US economic data is better than expected, it would indicate strong consumer spending and confidence in the economy.
This positive economic outlook could spill over into the cryptocurrency market, as investors may interpret it as a sign of overall market strength and stability.
Higher consumer spending could lead to increased disposable income, which some individuals may allocate to cryptocurrencies like Bitcoin.
According to data from BeInCrypto, BTC was trading for $97,040 as of this writing, down by 0.01% since Monday’s session opened.