After eight consecutive red daily candlesticks, Bitcoin price finished the day with a green daily candle yesterday. Bitcoin and the crypto market are entering a week that could be a trendsetter for the crypto market, if not a blockbuster week in macro terms. Especially Friday may once again be the most important day of the week. Here are the details…
Critical times are coming for Bitcoin and altcoins
Last week, the US Dollar Index (DXY) bounced up from a historically important support level, putting significant pressure on the Bitcoin and crypto markets. Weaker-than-expected consumer expectations, declining US consumer confidence and sticky core inflation boosted DXY, which will remain a key focus this week.
On 16 May, European Central Bank Christina Lagarde will give a speech at 17:00 CET. On the other hand, again on Tuesday, May 16 at 3:30 pm, the US Census Bureau will release the final figures for US Retail Sales for April. The final figure for March was -0.6%, well below the forecast of -0.4%. Consumer sentiment is expected to recover by 0.7% for April. Strong consumer spending is seen as supportive for DXY and could accelerate the rally. On the other hand, if the data is below the estimates, it will show that consumers are reluctant to spend. Accordingly, DXY is expected to consolidate again and provide a boost for Bitcoin and crypto prices.
At 3:30 p.m. Wednesday, May 17, the U.S. Census Bureau will release preliminary figures for U.S. building permits for April. Recently, the US stock market has reacted positively to housing data, followed by better-than-expected Bitcoin price. The number of new housing permits issued in April came in at 1,430 million, slightly above estimates. If the 1,430 million housing permit expectation is exceeded again, this could be another catalyst for the market. Again on May 17, CPI data in the European Region will be announced at 12:00 CEST. On the other hand, data on crude oil stocks in the USA will appear at 17.30 CEST.
Towards the end of the week, important developments intensify
A day later, on Thursday, the 18th (at 3:30 p.m.), the Philadelphia Fed will release its latest manufacturing index. The Philadelphia Fed manufacturing index is considered a leading indicator for the crucial ISM purchasing managers index. It may therefore be important to the broader financial market. If the index stays below the forecast of -19.0 for the fourth consecutive month, the downward reaction in the financial market is likely to repeat itself, as it did last month. On the other hand, an above-predicted reading would be bullish as it would reduce the likelihood of a recession in the near future. Again, on the 18th, we will see data on applications for unemployment benefits in the USA.
Friday, May 19, is the most important day of the week, as FED Chairman Jerome Powell will be in front of the cameras at 18:00 and may provide new information about the Fed’s interest rate and monetary policy stance in the coming months. Market volatility is likely to increase. Specifically, 14 Fed members are scheduled to speak this week, each with a different perspective.
Relationship between Bitcoin and DXY
As far as DXY is concerned, a decision may be made soon. As technical analyst Gert van Lagen explained, DXY may experience a head and shoulders turn similar to that seen in 2020/2021 – but this time it signals a downtrend rather than an uptrend. Also, as analyst Tony Spilotro recently shared on Twitter, the DXY reversal in late 2020 marked the start of the Bitcoin bull run. Time will tell if history will repeat itself.
There are also important developments in the field of crypto money.
Finally, if we look at the cryptocurrency space, Amazon is expected to launch its NFT marketplace today. On the other hand, on Thursday, May 18, the Bitcoin Miami event will begin and last for 3 days. Also, also on Thursday, the Financial Services Committee of the US House of Representatives will affect the cryptocurrency space. Because the committee will hold a session on stablecoins on this date. As we have also reported as Kriptokoin.com, stablecoins are generally USD-pegged cryptos.
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