Bitcoin (BTC) appears to be in a consolidation phase and continues to ping-pong around $70,000.
Last week, the prevailing macro regime was once again confirmed: the US gross domestic product (GDP) for the fourth quarter of 2023 came in higher than expected and the number of unemployment claims was actually lower. The economy and the labor market look solid.
To top it all off, Core PCE inflation, the US central bank’s favorite inflation gauge, came in at 2.8 percent, exactly as expected.
What does all this mean for the bitcoin price and what can we expect from the coming week in terms of macro?
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Inflation remains a danger
As you may know, January and February showed that inflation in America was still slightly higher than expected. As a result, the central bank cannot yet start lowering interest rates, which is important for the bitcoin price.
The reason for the upward pressure on inflation lies, among other things, in the compensation for American workers, which is still at an increased level due to the tightness on the labor market.
The increased pressure on wages in America has a direct impact on inflation, making it unlikely that it will fall towards the desired 2.0 percent in 2024.
In particular, inflation in America’s services sector (red) remains high at the moment, causing the US central bank to struggle to get inflation under control.
For now, that seems to be the main factor in the lack of interest rate cuts in America.
Next Monday and Friday are important for the bitcoin price
Monday appears to be a crucial day for the bitcoin price next week.
In the macro overview above for next week, we see the ISM surveys appearing on Monday. These are questionnaires completed by major parties within the respective sectors, which provide insight into the health of the industry.
It also contains information about the prices that purchasing managers within the industry face, potentially giving us important insights into inflation. We may start the trading week on a volatile note on Monday.
Then on Friday we get the Change In Nonfarm Payrolls (NFP), which tells us more about the health of the US labor market and could also make for a volatile end to the week.
Plenty of fireworks planned for next week!
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