Why Does Macroeconomics Still Dictate Bitcoin’s Price Action?
The cryptocurrency market doesn’t operate in isolation. For several months now, the correlation between Bitcoin and traditional indices (S&P 500, Nasdaq) has remained strong, turning every US economic announcement into a genuine volatility catalyst. After a week marked by mixed signals — notably a moderating PCE inflation reading and resilient jobless claims at 206,000 — investors are navigating in uncharted waters.
The stakes are enormous: anticipating the Federal Reserve’s next decision at the March 17-18 FOMC meeting. If the economic data released this week suggests a US economy that’s too robust, the Fed could delay rate cuts, a bearish scenario for risk assets like cryptos. Conversely, signs of slowdown could revive hopes for a dovish pivot, conducive to a new rally.
The 4 US Data Points to Watch Like a Hawk
This week’s economic calendar is packed and could trigger violent wicks on the charts. Here are the events likely to trigger massive liquidations or offer entry opportunities:
- Consumer Confidence (Conference Board): Scheduled for Tuesday, this data measures American household sentiment. A reading above expectations could strengthen the dollar (DXY) and put pressure on Bitcoin, causing a potential retracement.
- US GDP Revision (Q4): On Wednesday, markets will discover the second estimate of American growth. An upward revision would confirm the economy’s strength, pushing back the prospect of aggressive rate cuts. For Bitcoin, overly strong growth is paradoxically perceived as a short-term sell signal.
- Jobless Claims: Thursday’s weekly figure will be scrutinized closely. If claims remain low (under 210,000), it will confirm a tight labor market. Whales might then reduce their risk exposure, fearing a more hawkish Fed.
- Durable Goods Orders: This industrial activity indicator will set the tone for corporate health. An unexpected drop could signal economic slowdown, which, ironically, might be interpreted as a bullish signal for Bitcoin, with investors betting on increased central bank support.
Bitcoin: Should We Expect a Purge or a Massive Pump?
Technically, Bitcoin stands at a crossroads. After failing to break its major resistance last week, the price is currently testing lower liquidity zones.
If economic news is perceived negatively, a rapid dump toward lower supports can’t be ruled out to hunt liquidity from long positions (Long Squeeze). However, if indicators provide reassurance on inflation without showing an overheating economy, we could witness a Short Squeeze toward $72,000.
Late February promises to be explosive. Investors must remain cautious and avoid FOMO on short-term impulsive moves. According to traders Killa and DrProfits, the drop isn’t over yet.
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