4 US Economic Events to Drive Bitcoin Sentiment This Week

2025-01-14 12:23:22 Primitive Reading

From beincrypto By Lockridge Okoth

Crypto markets must brace for volatility this week, with four US economic data capable of influencing investors’ portfolios.

These macroeconomic data come as Bitcoin (BTC) remains below the $100,000 mark. Analysts anticipate further downsides, but a glimmer of hope remains, pegged to Donald Trump’s inauguration in seven days.

PPI

On Tuesday, the US PPI (Producer Price Index) data will be out, with the report by the US Bureau of Labor Statistics (BLS) expected to have crypto implications. Specifically, the US PPI report offers insight into inflation at the producer level. It also provides early signals about future consumer prices and, therefore, can influence investor sentiment.

This week’s US PPI report will disclose December’s producer-level inflation, with a median forecast of 0.3%, down from 0.4% in November. November’s data exceeded both the forecast and consensus expectations, marking the fifth straight month of rising PPI. Elevated producer prices in November indicated that inflationary pressures were still persistent.

It indicated the Fed’s battle against inflation with higher interest rates was far from over. Therefore, financial markets, including crypto, will be watching this US economic data on Tuesday. Any significant deviation from expectations could influence rate-cut expectations and market sentiment.

CPI

Alongside the Producer Price Index (PPI), the US Consumer Price Index (CPI) is a key focus in this week’s economic data. Last week’s FOMC minutes highlighted policymakers’ concerns about the potential inflationary impact of President-elect Donald Trump’s proposed policies, with little indication that the Fed might cut rates soon.

According to Reuters, economists expect year-over-year (YoY) headline CPI inflation to rise slightly to 2.8% from November’s 2.7%, with projections ranging between 2.6% and 2.9%. Core inflation, which excludes food and energy, is predicted to increase to 3.3%.

As the market awaits the CPI release on Wednesday, higher-than-expected inflation could amplify doubts about the Fed’s ability to lower interest rates. This concern is further compounded by the inflationary effects of Trump’s proposals. Such developments could strengthen the US dollar, potentially exerting downward pressure on Bitcoin.

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