The community is watching 3 important milestones this month that could have a profound impact on the market's trajectory cryptocurrency and the broader macroeconomic environment in the United States this year.
Consumer Price Index (CPI) released on July 13
On July 4th, Michael van de Poppe, CEO and founder of the educational, consulting platform cryptocurrency EightGlobal, says "all eyes on next week's CPI data" and bullish forecast Bitcoin if it crosses the $20,000 level.
“The chart is vague, but will look at $28,000 for Bitcoin, if can flip 20,000 USD (and I will watch 23,000 USD for the middle zone). All eyes are on next week's CPI data and the US Federal Reserve (Fed), but what will it mean?"
The CPI is one of the benchmarks for assessing the progress of inflation by measuring the average change in consumer prices based on a variety of representative household goods and services.
Inflation continues to rise which could affect demand for cryptocurrencies, as users need to spend more than before.
The interesting thing is though Bitcoin created amid high inflation following the 2008 Global Financial Crisis and introduced as a hedge against inflation due to its fixed supply and scarcity, recent years have seen it in action. behave similarly to traditional tech stocks and lose their resistance to inflation.
Follow information Officially, the next CPI release schedule is scheduled for July 13, 2022 and is done by the US Bureau of Labor Statistics.
Currently, the market is on the same page as the June CPI or inflation rate estimate of 8.7%, slightly higher than May's 8.6%.
Will the Fed raise rates more on July 26-27?
After raising interest rates by 75 basis points in June, one of the biggest monthly increases in 28 years, rates are expected to continue rising after the US Federal Open Market Committee (FOMC) meeting. ) later this month.
Raising interest rates is one of the main tools used by the Fed and the US Central Bank to manage inflation by slowing down the economy. Rising interest rates lead to increased lending activity and borrowing costs, limiting consumer and business spending.
It can also put downward pressure on the price of risky assets, such as cryptocurrencies, as investors begin to earn decent returns just by depositing money into an interest-bearing account or risky asset. low risk.
This month, the FOMC is expected to decide whether to adopt a 50 or 75 basis point increase. Charlie Bilello, founder and CEO of Compound Capital Advisors, has place a bet to a higher number.
Q2 GDP estimates released on July 28
On July 28, the US Office of Economic Analysis (BEA) will release its GDP estimates for the second quarter of 2022.
After recording a -1.6% GDP decline in Q1 2022, the Atlanta Federal Reserve's GDPNow tracker is now predicting a -2.1% drop in GDP growth in Q2 2022.
A second consecutive quarter of GDP contraction will send the US into a "technical recession".
If the economy of this great power is officially classified as a recession (expected to start in 2023), Bitcoin will face a full-blown recession for the first time and is likely to continue its decline alongside tech stocks.
Positive signs in the industry?
Despite the bleak macro forecasts, some leading experts see the recent macro-led crypto market crash as an overall positive sign for the industry.
Expert Erik Voorhees, Co-Founder of Coinapult, CEO and Founder of ShapeShift, said The current incident is "least worrisome" for him, as it is the first incident to have originated from macroscopic factors in outer space.
Alliance Core Contributor Qiao Wang KNIFE made a similar comment, noting that this was the first cycle of bear raging that stemmed from an “exogenous factor.”
People who are worried about crypto because of macro realize how bullish this is right?July 4, 2022
This is the first cycle where the main bear case is an exogenous factor. In previous cycles it was endogenous, ie, Gox (2014) and ICOs (2018).
“Do those who are worried about crypto because of the macro factor realize how bullish this is? This is the first cycle that bears raging stem from exogenous factors. In previous cycles, it was mainly due to factors from within the space, e.g. Mt.Gox (2014) and ICO (2018)”.