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The cryptocurrency market has entered a critical week in the US, where the Consumer Price Index (CPI) and Producer Price Index (PPI) data will be announced, and it will be determined whether the FOMC members will pause the interest rate hike. Developments throughout the week will lead to the rise of the crypto king Bitcoin (BTC), the rise of the altcoin king Ethereum (ETH), a market-wide recovery, and confirmation of the upward outlook for the rest of the year.
Eyes on Data from the US
Global markets expect the annual CPI in the US to exceed the rate of 3.2% recorded in July and reach 3.6%. Additionally, the core annual CPI for August is expected to come in at 4.3%, compared to 4.7% in July. The market predicts that the monthly core PPI data will decrease to 0.2%. Furthermore, with the cooling of the labor market and the increase in the unemployment rate last month, it is expected that the Federal Reserve (Fed) will put an end to interest rate hikes.
Investors are awaiting the CPI and PPI data to confirm the potential direction in the cryptocurrency market, as they enter the most critical week of September, which historically tends to perform poorly.
Although the CME FedWatch Tool indicates a 93% chance of a pause in interest rate hikes at the next FOMC meeting on September 20, Wall Street analysts expect the Fed to make another interest rate hike before the end of the year. Despite relatively positive expectations, the US dollar index (DXY) is still trading above the 104.50 level, indicating the risk of continued pressure on the price of BTC. Additionally, the European Central Bank (ECB) is expected to announce its next interest rate decision on September 14. It is expected that the ECB will pause its continuous interest rate hikes since last year.
Bitcoin and Altcoins Under Pressure
The cryptocurrency market is under pressure due to the rise in DXY and the delay in the US Securities and Exchange Commission’s (SEC) decision on spot Bitcoin ETFs. Although traditional market participants are pressuring the US federal regulator to approve a spot Bitcoin ETF, the desired approval has not yet been obtained and the SEC is dragging its feet.
While the price of BTC has remained flat over the past 24 hours and the past week, it is currently trading at $25,862 at the time of writing this article. However, the increase in trading volume in the past 24 hours indicates an increase in interest among investors and traders. On the other hand, the price of ETH has decreased by 1% in the past 24 hours and approximately 2% over the past week. The price of the altcoin, which is trading between $1,615 and $1,627, the highest level in the past 24 hours, has seen an 85% increase in trading volume.
