This week has been incredibly eventful for cryptocurrencies, with the latest major report of the day just released. Despite an employment report that indicated a bullish trend for cryptocurrencies, Bitcoin’s price dipped below $87,000. The PMI figures, however, came in below expectations. What does the recently published PMI report signify for cryptocurrencies?
PMI and Bitcoin
We had already discussed what to expect in our weekly calendar announcement on Sunday. Today, the employment data was unveiled, and now focus has shifted to the inflation report. The preliminary PMI data, reflecting the state of the economy, has just been announced. It was anticipated that the PMI figures falling short of expectations would benefit cryptocurrencies, and indeed, the numbers were below expectations. Combined with a 4.6% unemployment rate, this news helped BTC climb back to $87,600.
Whether this recovery is sustainable remains uncertain, and concerns regarding Friday’s interest rate decision persist. Nonetheless, short-term recoveries are not uncommon. If BTC maintains its strength, the recent figures might allow for a brief surge to $90,000.
Today’s PMI data consists of preliminary numbers, which indicates they have a potential for significant deviation before the final report. The report, which shows the recent economic growth momentum has weakened, could sway the Fed to make a favorable interest rate decision for bulls in January.
Chris Williamson, Chief Economist at S&P Global Market Intelligence, commented on the report:
“The survey data foresees a GDP growth of about 2.5% annually in the fourth quarter, though growth has slowed for two months. As we approach 2026, economic activities might weaken further with new sales sharply decreasing before the holiday season. Signs of weakness are widespread; work flow in the broad services economy is almost at a standstill, and factory orders have decreased for the first time in a year. While manufacturers maintain production increases, the decline in sales points to unsustainable production levels unless demand revives in the new year. The service sector experienced one of the slowest months for sales growth since 2023. Companies also mildly lost confidence in the future and restricted hiring in December to adapt to the tough business environment. The main concern is rising costs. Inflation soared to its highest since November 2022, resulting in one of the sharpest sales price hikes in the past three years. These price increases originally impacting the manufacturing sector are now extending to services, further broadening affordability issues.”
Indeed, inflation concerns detailed in the report undermine the appetite triggered by the below-expectation figures in the crypto market.
