The impact of US economic data on cryptocurrencies, particularly Bitcoin (BTC), is becoming increasingly clear. Investors perceive the pioneering coin as a safe haven asset during periods of economic uncertainty.
Therefore, crypto traders and investors must be prepared, as three major US macroeconomic data releases this week can influence the volatility of digital assets.
Initial Jobless Claims (10/24)
Amid concerns over climate-related disasters, unemployment figures surged explosively in October, reaching the highest level since August 2023. This data will be released on Thursday, recording the weekly unemployment figures for the week ending October 19. It will show the number of people who applied for unemployment benefits last week.
The median forecast by MarketWatch of 250,000 for this unemployment figure is expected to be high, given the storm damage and labor disruptions. Specifically, the consensus estimate of economists is that the initial jobless claims will come in around 245,000, as some residents of states affected by last week's hurricane still remain without power.
Higher-than-expected unemployment figures could signal a weakened job market in the aftermath of natural disasters. It may also impact views on the Fed's interest rate plans. The Fed has a dual mandate of price stability and maximum employment. Officials have recently indicated they will prioritize the labor market as inflation has moderated.
Read more: How to Protect Yourself from Inflation Using Cryptocurrency.
Therefore, high jobless claims could increase the likelihood of rate cuts, which could be supportive of Bitcoin. Conversely, lower-than-expected jobless claims could signal a strengthening economy, boosting investor confidence and increasing demand for risk assets like Bitcoin.
US Manufacturing PMI (10/24)
This data, to be released on Thursday, October 24, will provide insights into the health of the manufacturing sector. As one of the interest rate-sensitive sectors, manufacturing can benefit from an easing cycle. Economists predict a recovery in manufacturing, which will drive earnings growth for the S&P 500 until 2025.
However, the Manufacturing PMI, which was previously 47.3, is expected to rise slightly to 47.5. Nevertheless, a reading below 50 indicates contraction in manufacturing and a negative outlook for manufacturers. The index has been negative for 22 out of the last 23 months, a longer negative period than the 08-09 Great Recession.
If the PMI index exceeds 50, it could signal an expansion in the manufacturing sector, which could be interpreted as a positive signal for the overall economy. This could increase interest in cryptocurrencies as a hedge against inflation.
US Services PMI (10/24)
Similar to the Manufacturing PMI, the Services Purchasing Managers' Index (PMI) will provide insights into the health of the services sector. The Services PMI is expected to dip slightly from the previous reading of 55.2 to 55.
Considering the intertwined relationship between cryptocurrencies and macroeconomic trends, investors will closely monitor these economic indicators for clues about future price movements. Positive results from the jobless claims and PMI data could bolster sentiment and drive further gains in Bitcoin and other digital assets.
However, this week's US economic data calendar is relatively quiet, with all the aforementioned macro reports being released on the same day. Against this backdrop, Neil Sethi, managing partner at Sethi Associates, recommends that investors make the most of this light release week, as he expects more volatility next week.
"This week is light on major reports, but next week will be more than made up for. We'll get the full October employment report, the first read on Q3 GDP and ECI (including September personal income & spending and PCE prices), and most of the Magnificent 7's earnings, Treasury borrowing announcements, etc. So make the most of this light week," Sethi wrote.
Read more: How to Buy Bitcoin (BTC) - Everything You Need to Know
According to BeInCrypto data, Bitcoin is currently trading at $67,276 at the time of writing, down 2.50% from the previous day as of midnight on the 22nd.
