• The digital currency ecosystem is awakening with new growth potential.

  • Sentiment is building partly due to positive economic data scheduled for release this week.

Investors are advised to pay close attention to certain economic and financial data that had an impact on trading last week, especially after the U.S. Securities and Exchange Commission (SEC) took enforcement action against Binance and Coinbase, which caused a sharp drop in cryptocurrency prices. Bitcoin (BTC) and other cryptocurrencies were affected by the crackdown on these digital asset service providers.

The price of the largest cryptocurrency by market capitalization plummeted to $25,400. So far, it corrected to a multi-month low of $24,750 last week.

The coin faced several liquidation actions that threatened its chart mark at $25,000, but it remained resilient and is gradually recovering. Meanwhile, news about BlackRock’s application for a spot Bitcoin exchange-traded fund (ETF) played a role in driving the cryptocurrency’s bullishness. Currently, BTC is trading at $26,429.81.

Economic data will cause reactions in the crypto market

Some economic data that could impact the new trading week is that, firstly, the trading week will be ushered in by fresh data on the U.S. housing market. In addition, preliminary data on U.S. building permits for May is scheduled for release on Tuesday.

Notably, the number of permits granted is an indicator of the health of the U.S. housing market. Analysts had forecast a small increase to 4.35 million in January from 4.171 million in January.

Federal Reserve Chairman Jerome Powell will face hearings on U.S. monetary policy in the Senate and House of Representatives on Wednesday and Thursday, answering questions from politicians.

The questions typically plague the annual review of the Federal Reserve's economic and financial policies, with politicians from both Democrats and Republicans wanting specific reasons for all of the central bank's actions last year.

Any unclear statement from Powell will trigger a reaction in the stock market. Any significant price movement in the US Dollar Index (DXY) and the US stock market will translate into a reaction in the price of BTC and other cryptocurrencies.

On the second day of Powell’s hearing, current sales data for existing properties in the U.S. real estate market will also be released. The work week will end on Friday, when the Purchasing Managers Index for the U.S. services sector will be released. All of this economic data could affect the price of BTC and other tokens this week.

Additionally, the SEC’s decision to settle with Binance at the request of U.S. District Judge Amy Berman Jackson to avoid an asset freeze sparked a recovery in the broad crypto market.