The Bitcoin and crypto markets have had an extremely bullish week. While the BTC price has risen by 14.5% in the last seven days, reaching a new yearly high of $31,432, the total market capitalisation of the crypto market has increased by 10.7%.
The market continued to soar on news of the BlackRock Bitcoin ETF, bucking a price consolidation in the US equity markets. However, it remains to be seen whether this rally can continue or the bulls will run out of steam. In the coming week, five events in particular will come into focus that could set the trend for prices on the Bitcoin and crypto markets.
Fed And Macro Data In The Spotlight
On Wednesday, June 28, US Federal Reserve (Fed) chairman Jerome Powell will once again appear in front of the cameras. After Powell had to testify before the US Congress on various topics last week, the focus this time will again be on the current interest rate and monetary policy.
It is likely that the Fed Chair will reiterate his hawkish stance and the Fed’s data dependence. Only surprises are likely to have a (negative) impact on the market, which, according to the FedWatch Tool, is expecting another 25 basis points (bps) hike in July with 72% anyway.
But the Fed’s results on the stress test of banks in the US could also be quite interesting on Wednesday. In view of several emergency interventions and the still increasing use of the Bank Term Funding Program (BTFP), the report is eagerly awaited. The market will be watching closely to see how healthy the banking system is and which banks may fail the test.
If a number of banks do not pass the test, this is likely to have an impact on the financial markets. Already in March, dwindling confidence in the US banking system caused an upward trend in BTC. Besides that, the US dollar index (DXY) could come under further pressure, providing a tailwind for Bitcoin and crypto prices.
On Thursday, June 29, the U.S. Bureau of Economic Analysis will release the latest preliminary U.S. gross domestic product (GDP) figures for the first quarter of 2023 at 8:30 am EST. The forecast is 1.4%, once again stronger than last time (1.3%).
Even though this still leaves US GDP well below 2%, confirming or exceeding the forecast could point to a stabilization of the US economy. The broader financial market as well as the Bitcoin and crypto markets will probably take this positively. If, on the other hand, the current estimate is missed, a bearish reaction can be expected.
On Friday, June 30, the Bureau of Economic Analysis will release the core PCE (Personal Consumption Expenditures) for May at 8:30 am EST. In April, the core PCE was +0.4% on a month-on-month basis, again above the forecast of +0.3%. For May, analysts expect a further increase of +0.4%. On an annual basis, analysts expect 4.7%, no change from April (also 4.7%).
Remarkably, core inflation remains the focus of the Fed, as it is currently proving to be the “stickiest”. In this respect, core PCE could have an important impact on the likelihood of another rate hike by the Fed. The crypto market will therefore closely monitor the data and is likely to react accordingly.
$5 Billion In Bitcoin Options Set To Expire
The upcoming Friday will also be important for the Bitcoin market for other reasons. First, BTC will close its monthly and quarterly candle, and second, a record-breaking amount of over $5 billion in Bitcoin options will expire on June 30. The event may cause a sharp increase in volatility for a short time.
Analyst @52Skew remarks:
So to me pretty clear positioning here is $31k call selling (near date) ~ likely to see spot buying $30K & put selling on dips. OTM call buying $40K (futures sell opportunity when APR is high). Market can remain pinned here till 30th June expiry / rollover.
At press time, the Bitcoin price stood at $30,250 after taking a breather over the weekend.
Featured image from iStock, chart from TradingView.com