The cryptocurrency market is gearing up for a pivotal week ahead, marked by important events that could guide investor sentiment and the course of the market. With Bitcoin recently reaching an all-time high, anticipation is building as key inflation data and various developments emerge. These events, from Federal Reserve announcements to blockchain upgrades, are expected to impact market dynamics in the coming days.
Meanwhile, inflation data carries weight after Federal Reserve Chairman Jerome Powell's testimony pointed to possible interest rate cuts, but the timing remains uncertain, sparking discussions in the cryptocurrency market. Powell's comments before the Senate Banking Committee suggest that interest rate cuts could be coming soon, pending inflation remaining at 2%.
Market expectations are shifting from early year expectations of multiple cuts to anticipating the first cut in June, for a total of a percentage point cut by the end of 2024. Furthermore, Powell stresses the need to avoid a recession, suggesting a cautious approach to policy normalization as the economy recovers.
Key events to watch this week
US Consumer Price Index data
US Consumer Price Index (CPI) data for February, considered crucial for the Federal Reserve's assessment of inflation, is scheduled to be released on March 12. Notably, investors in the cryptocurrency market are awaiting insights into the Fed's future policy as annual CPI inflation fell to 3.1% in January. Slightly exceeding expectations.
In addition, annual core inflation in January remained steady at 3.9%, above expectations. Although January saw a calm trend compared to December, the CPI was still above the Fed's target of 2%, indicating continued inflationary pressure in the economy.
US Producer Price Index data
On Thursday, March 14, the US Producer Price Index (PPI) will be released, impacting the Fed's potential decisions to cut interest rates. In January, the producer price index rose 0.3%, marking the largest increase since August 2023.
On the other hand, the core Producer Price Index, excluding food and energy, saw a rise of 0.5%, beating Wall Street expectations. Keeping in mind that the CPI and PPI data for February will be closely watched by crypto market enthusiasts looking for the Fed’s possible move with its upcoming interest rate cut plans.
Read also: Ethereum's Layer 2 Ecosystem Crosses $37 Billion, Leaving Competitors Behind
Ethereum dencon upgrade
Investors in the cryptocurrency market are feeling optimistic with the arrival of Ethereum's eagerly awaited Dencun upgrade on March 13. The upgrade promises to reduce transaction costs on Layer 2 networks and is expected to boost activity and attract mainstream interest.
With the focus on a potential rise in Ethereum prices following the upgrade, anticipation is high among investors in the cryptocurrency market amid uncertainty looming in the market. Furthermore, optimism about the Ethereum price is also rising amid anticipation of the SEC's approval of an Ethereum ETF.
Fed BTFP expiration
Investor anxiety is mounting in the cryptocurrency market, as March 2024 marks the end of the Federal Reserve's BTFP program, an important scheme to stabilize the US banking sector. Launched in response to bank failures, it expires on March 12, raising concerns about the impact on liquidity and potential effects on cryptocurrency prices.
Notably, the program, which was launched amid uncertainty over the pandemic, aims to counter the repercussions of bank failure and rising interest rates, signaling a pivotal moment for market stability.
Meeting of FTX clients and non-client creditors
On March 15, FTX Digital held its inaugural meeting with both client and non-customer creditors, sparking anticipation throughout the cryptocurrency market. The outcome of the deliberations carries importance for the cryptocurrency space, which may affect investor sentiment and market stability.
minimum
In a week full of pivotal developments, the cryptocurrency market is bracing for the impact of crucial inflation data, which is expected to influence the Federal Reserve's interest rate decisions. Amid this anticipation, optimism surrounds the imminent Ethereum Dencun upgrade, which is expected to enhance scalability and reduce transaction costs.
Furthermore, market participants remain vigilant as fears over liquidation grow, with the Fed's BTFP expiration approaching. As investors navigate this dynamic landscape, attention is being drawn to the intersection of macroeconomic indicators, technological advances, and regulatory shifts, shaping the trajectory of the cryptocurrency market in the coming weeks.
Read Also: Binance Vs SEC- Could Binance Class Action Lawsuit Open the Door for Summary Judgment?
