The influence of US economic data on the cryptocurrency market, especially Bitcoin (BTC), is becoming more evident. Many investors see Bitcoin as a safe choice during uncertain economic times.
As a result, cryptocurrency traders and investors should prepare for potential changes in the market as the US gears up to release three important economic reports. These reports are expected to create fluctuations in the value of digital assets.
Initial Jobless Claims To Impact The Cryptocurrency Prices
Amid worries about climate-related disasters, unemployment figures have surged this October, reaching levels not seen since August 2023. The unemployment claims report for the week ending October 19 is set to be released on Thursday this week.
The report will reveal how many people filed for unemployment during the past week. This information is crucial for understanding the job market and economic conditions. It can help investors and policymakers gauge the impact of unemployment on the economy.
The median forecast for unemployment claims on MarketWatch is 250,000. These figures are expected to be high due to storm damage and labor stoppages.
However, economists estimate that initial jobless claims will be around 245,000. This expectation arises because some residents in states hit by hurricanes were still without power last week.
If the unemployment figures come in higher than expected, they could signal a weakening job market following these natural disasters. A rise in claims may also impact people’s views of the Federal Reserve’s plans for interest rates.
The Fed has a dual mandate to ensure price stability and promote maximum employment. Recently, Fed officials indicated they would focus on the labor market as inflation cools.
Increased jobless claims might spark optimism for a more significant interest rate cut, potentially benefitting Bitcoin.
If the job claims are lower than expected, it could indicate a strengthening economy. This could enhance investor confidence and drive demand for riskier assets like Bitcoin.
US Manufacturing PMI
Additionally, the US will release this data on Thursday, October 24. This data will offer insights into the health of the manufacturing sector.
Notably, the manufacturing industry is sensitive to interest rates. Therefore, it may benefit from the current easing cycle. Economists predict a recovery in manufacturing. This recovery could boost earnings growth for the S&P 500 through 2025.
Currently, the manufacturing PMI is at a previous reading of 47.3. Experts expect this index to rise slightly to 47.5. However, any number below 50 indicates a contraction in manufacturing, suggesting a negative outlook for manufacturers.
The index has been negative for 22 of the last 23 months, indicating a longer negative streak than during the great recession of 2008-2009. If the PMI reading goes above 50, it indicates expansion in the manufacturing sector, which could be a positive sign for the overall economy.
US Services PMI
The Services Purchasing Managers’ Index (PMI) will also give insights into the health of the services sector. The Services PMI is expected to dip slightly to 55 from the previous reading of 55.2.
Investors will closely watch these economic indicators because of the growing correlation between cryptocurrency assets and macroeconomic trends. Positive jobless claims and PMI data could improve sentiment and increase prices for Bitcoin and other digital assets.
However, this week is relatively quiet on the US economic data calendar, with all the essential reports arriving on the same day.
Neil Sethi, managing partner at Sethi Associates, advises investors to utilize the light data fully this week. He warns that next week could bring more volatility.