The impact of this news on the cryptocurrency market can be viewed as follows:
First, Tuesday's U.S. CPI data is crucial. If inflation numbers skyrocket, the Federal Reserve may be more inclined to raise interest rates, which would make the money in everyone's hands more valuable, potentially leading to a sell-off of high-risk assets like Bitcoin, causing prices to drop. Conversely, if inflation decreases, the Federal Reserve might breathe a sigh of relief and even consider lowering interest rates, which would increase the money supply in the market, potentially flowing into the cryptocurrency space and pushing prices up.
Next are the speeches from the Federal Reserve officials. If Powell says "no more rate hikes" or "ready to ease monetary policy," market sentiment will immediately perk up, and Bitcoin could rise accordingly. However, if he states, "inflation is too high, we must hike rates," people might panic and quickly sell their coins, leading to a potential price crash. Thursday's PPI and unemployment data are also indicators. If PPI rises sharply, it indicates high factory costs, suggesting that prices will rise further, possibly forcing the Federal Reserve to continue raising rates, which would be bearish for the cryptocurrency market. If unemployment suddenly decreases, it suggests that the economy is doing well, bolstering the case for rate hikes, which could put pressure on coin prices; if unemployment surges, people might feel that the economy is faltering and bet on the Federal Reserve lowering rates, potentially leading to a rise in the cryptocurrency market.
If the China-U.S. talks go smoothly, and people's perceptions of trade frictions ease, global market sentiment could improve, leading Bitcoin to rally. If talks break down, risk appetite may decline, dragging down coin prices.
The news regarding Trump needs to be assessed based on its specifics. If he suddenly expresses support for cryptocurrencies or introduces favorable policies, the market could soar. Additionally, if expectations for Federal Reserve rate cuts become stronger, and hot money has nowhere to go, it may flood into the cryptocurrency market seeking opportunities, causing prices to spike.
Overall, this week the cryptocurrency market mainly focuses on two points: first, whether inflation data will prompt the Federal Reserve to ease up, and second, whether the officials' speeches will be dovish enough. Good data and soft speeches could lead to a rebound in coin prices; poor data and hawkish speeches may signal a cautionary adjustment. Other factors, such as China-U.S. talks and news from Trump, could cause short-term volatility, so those trading short-term should keep a close eye on the news.
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