- Market events, such as FOMC meeting, CPI and employment data, might trigger a strong crypto sell off.
- In addition, the US is now in recession.
- Bitcoin’s price today shows strong support despite these events.
Over the past week, Bitcoin experienced a downward trajectory after running into the $24,000 resistance. The recent upward run of Bitcoin, as it slowly recovers from June’s meltdown, continuously retests the resistance.
However, recent market events show Bitcoin’s unreliability and there’s a high chance it might lose its support. These events include the Federal Open Market Committee (FOMC) meeting and reports such as Consumer Price Index (CPI) and employment data, which will both be released at the end of the week.
Investors show less interest in risk-on assets, including Bitcoin, when the market is weak. The risk-on sentiment is being favored whenever the economy starts growing.
Among the mentioned events, the most essential would be the FOMC meeting. This is where investors react depending on whether the US Federal Reserves decides to reduce or increase interest rates.
The data that CPI provides helps investors to get a rugged idea of consumer spending and tracks inflation. On the other hand, the employment data helps scale the purchasing capability in the market.
Data shows that if unemployment continuously rises, people will have to spend on basic necessities rather than investing in cryptocurrencies. Both CPI and unemployment data fundamentally helps measure the strength of an economy and both influence asset prices.
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Meanwhile, the US is now officially in recession. President Joe Biden said the country “hit more than six straight weeks of declines, making this the fastest drop in gas prices in over a decade.”
So far, Bitcoin’s demand was able to tone with the existing selling pressure. However, Bitcoin’s registered cap fell moderately over the past week despite the significant pull back.
At the time of writing, the price of Bitcoin is at $23,773.39, up 7.73% in the past 24 hours. However, recent events might trigger a stronger sell-off due to the adverse data.
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