Since the first day of March 2023, the crypto market capitalization has remained above $1 trillion while the price of Bitcoin has not gone below $22,200. As the year moves on, will there be a change in the market output of crypto in the next one month?
To know more about the forces that might change market input and output in the next one month, here are four important events all crypto traders need to pay attention to in the month of March:
10th March 2023
Coming out of this date will be the data for the job market in the US. This data reveals the employment situation in the US relative to how many persons are employed, how many are unemployed, how many jobs were lost, and how many jobs were created. Other data shows the average number of hours people work weekly, and average hourly earnings as well as other unemployment indices.
It is a monthly release by the U.S. Bureau of Labor Statistics (BLS), based on surveys obtained from households and employers. Because the report can impact the financial market as it shows the state of the US economy, it is one of the tools the Federal Reserve uses to assess the state of the US economy and implement better monetary policies.
On the same day, creditors of the bankrupt Mount Gox company are expected to start receiving their bitcoins. Mount Gox was a Japan-based Bitcoin exchange launched in 2010 and at the time handled 70% of all bitcoins in the world. In 2014, it was hacked with thousands of bitcoins stolen, thereby pushing it to bankruptcy.
However, seven years later, an agreement was reached between creditors and the Tokyo District Court to rehabilitate the company and also compensate its creditors. If these creditors receive their bitcoin, will they sell? If they sell, that means selling pressure will be exerted on the price of the largest cryptocurrency. What if they hold? If they hold, then it will be good for the market as it shows that they believe in the value that bitcoin has.
14th March 2023
The world would expect the next CPI data on this date from the US. The Consumer Price Index (CPI) reveals how much has changed in the prices of consumer goods and services in the US. It is one of the tools that indicates the level of inflation in the country which stands as a pointer for the Fed. to either increase the interest rate or decrease interest rates. CPI is used to measure inflation and deflation.
If inflation goes up, and the Fed. decides to increase rates, will it influence crypto buys or sells?
15th March 2023
The day after CPI is released, the PPI will be released too by the same Bureau of Labor and Statistics. PPI (Producer Price Index) data, which is released monthly, shows the average change in selling prices for domestic goods and services in the US.
In simple terms, PPI measures how prices have changed from the sellers’ point of view. PPI reveals the level of inflation as seen by producers. While the CPI measures consumer prices, the PPI measures producer prices.
22nd March 2023
Finally, the Federal Reserve will hold another meeting on March 22, 2023. This meeting will determine if the interest rate will be raised, and if yes, by how many basis points.
The last meeting was held on January 31 / February 1, 2023. There will be six more meetings in May, June, July, September, October, and December.
Interest rate & the price of cryptocurrencies
In all of these dates, the underlying effect is what decision will be made relative to an interest rate by the Fed. If interest rates are raised, then borrowing money will become more expensive and it will most likely make consumers spend less, and therefore reduce inflation over time.
On the other hand, if rates are lowered, borrowing becomes more attractive, consumers spend more, and inflation goes up over time. Therefore these questions arise:
Will creditors of Mount Gox outrightly sell off their bitcoins or hold them?
Will consumers run away from buying more crypto if interest rates are increased or decreased?
How will the market react to the release of the BTC to creditors of Mount Gox and the interest rate decision by the Fed?
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7 mistakes to avoid when trading crypto in 2023
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