The cryptocurrency market has stalled in the past few days in a rather untypical fashion, but all that can change this week as there’re multiple major events and announcements coming from the world’s largest economy.
It starts with US Fed Chair’s testimony to Congress and spreads to jobless claims as well as the unemployment rate.
Powell to Testify
The US central bank reversed its monetary policy after the COVID-19 pandemic began to fade away and started rising the interest rate quite aggressively to battle the galloping inflation. The past several FOMC meetings have all resulted in hikes, some of which of 75 basis points. However, the Fed slowed down at the end of 2022, and the start of the new year brought similar sentiment.
Fed Chair Jerome Powell will head to Capitol Hill on Tuesday and Wednesday for two separate testimonies regarding the central bank’s future monetary policies. Most experts believe Powell will only double down on the bank’s plans to increase the interest rates by 25 basis points, as it has been doing lately.
Others asserted that the Fed will not raise the rates to 6% as previously feared. Nevertheless, most financial markets, including the highly volatile crypto space, have calmed while awaiting the outcome of the two meetings. Even the dollar has felt the consequences with a minor dip.
On Thursday, a day after Powell’s second testimony, the US is scheduled to announce the most recent data about the jobless claims. This is a weekly report by the US Department of Labor showcasing the number of people filing for unemployment insurance benefits.
It consists of two different types of claims – initial and continuing. The former shows the number of people who have filed for the first time, while the latter are those who have done it at least once before.
Being a vital indicator of the current economic state, the jobless claims typically lead to minor volatility in the stock markets, as well as crypto, especially if they are higher than expected. Riskier assets such as cryptocurrencies tend to dip in such cases.
Unemployment Rate and Fed Budget
Friday will shed more light on the US economy, with the unemployment rate coming at 8:30 AM EST. The estimations suggest that the percentage will remain the same as the previous month at 3.4%, which is the lowest since 1969. Further expectations about the job report indicate that the US added around 200,000 jobs in February, which is a notable decline from the over 500,000 in January.
The Federal Reserve budget will close the week at 2:00 PM EST, which shows the spending and revenues of the world’s largest economy. The government previously passed the $1.7 trillion budget for 2023, with the $45 billion allocated for Ukraine causing some concern.
Looking from the perspective of the crypto market, all of the above seem like potential catalysts for upcoming price volatility, especially given the stagnant price movements from the past few days. Such rare occasions are generally followed by big price moves.