TL;DR
- This week, the U.S. will release critical economic data such as GDP, the Consumer Confidence Index, and the PCE, all of which could directly impact the cryptocurrency market.
- A drop in economic growth or consumer confidence could create a risk-averse environment, negatively affecting the price of Bitcoin.
- On the other hand, strong housing sales or stable inflation figures may boost crypto investment by encouraging risk-taking.
Amid growing global economic tensions and just days before a new round of tariffs pushed by former President Trump takes effect, investors, including those in the crypto world, are closely watching five key U.S. economic indicators set to be released this week. These figures will not only act as a thermometer for the “health” of the American economy but could also trigger a wave of volatility that directly affects Bitcoin and other cryptocurrencies.
One of the most anticipated reports is the PMI (Purchasing Managers’ Index), which offers insight into business activity. In February, the manufacturing PMI rose to 52.7, suggesting expansion. However, forecasts for this week suggest a slight decline. If the number surprises to the downside, it could be seen as a sign of industrial slowdown, a factor that has historically led to corrections in risk assets.
Meanwhile, the Consumer Confidence Index from the Conference Board, due out this Tuesday, is generating high expectations. Last month, it stood at 98.3, but now it’s projected to fall to 94. If confirmed, it could reflect growing public concern about the economy, a sentiment that typically weakens equities and, by extension, cryptocurrencies.
New Home Sales and GDP: Mixed Signals for Investors
Another key figure will be new home sales. In January, they dropped to 657,000 units, but analysts expect a slight recovery this time. If realized, that rebound could be interpreted as a sign of economic stability, something that has historically supported Bitcoin by improving investors’ risk appetite.
On Thursday, we’ll also see the final reading of Q4 2024 GDP. The previous estimate showed growth of 3.1%, but it’s now expected to be revised down, possibly to 2.3%. Weaker growth could reinforce recession fears, although some pro-crypto analysts argue that this scenario might lead to looser monetary policy, a move that has historically benefited BTC prices.
Lastly, the PCE Price Index, the Federal Reserve’s preferred inflation gauge, could remain unchanged. A stable figure would likely calm markets and pave the way for lower interest rates, a scenario that typically boosts the crypto market.
