5 economic events that may impact the crypto market this week

This week, the crypto market will face a series of global macroeconomic events, each event bringing profound impacts on traditional financial markets and risk assets such as cryptocurrencies. Below are the important developments expected to strongly influence the economic landscape and investor sentiment in the crypto space this week.

Retail Sales in the US: The Pulse of Consumer Spending

At the beginning of the new week, retail sales data in the US will be released, providing an important insight into consumer spending trends. Economists are paying attention to whether the unexpected decline in January, due to Trump's tariffs and consumer caution, will continue into February.

If retail sales continue to maintain a positive level, this could be a sign that the US economy is still strong, thereby strengthening the USD. However, this could create downward pressure on the crypto market as investors tend to return to traditional assets. Conversely, if the figures do not meet expectations, this could lead investors to speculate on the possibility of the US Federal Reserve (Fed) cutting interest rates - a factor that is often beneficial for Bitcoin and the crypto market in general.

"Retail sales may be very weak considering recent news from last week. Perhaps this has already been reflected in the market, like the consumer sentiment index on Friday," a user shared.

FOMC meeting and Powell speech: Fed's next move

The Federal Open Market Committee (FOMC) will meet on March 18-19, and the speech after the meeting by Fed Chairman Jerome Powell is attracting great attention. After keeping interest rates unchanged at 4.25%-4.5% in January, the Fed's cautious stance on inflation and labor market strength has left the market speculating.

Recent statements by Powell indicate that the Fed does not have immediate plans to cut interest rates, but if consumer spending weakens and trade uncertainties persist, the agency may adjust its course. Traders are on high alert because if Powell takes a tough stance, the USD could strengthen, putting pressure on digital assets. Conversely, if Powell appears more dovish, the market may react positively.

If Powell's tone becomes gentle, liquidity trading algorithms will not wait for confirmation but will push the price of Bitcoin up before the market can react, a user noted.

Interest Rate Decision of the Bank of Japan: A Turning Point for the Yen?

On the other side of the Pacific, the Bank of Japan (BOJ) will announce its interest rate decision this Wednesday. This is a crucial moment after years of maintaining an ultra-loose monetary policy. Investors are speculating that the BOJ may raise interest rates, especially as Japan has recorded positive GDP growth for three consecutive quarters.

"Be prepared for more interest rate hikes from the Bank of Japan: Average monthly wages in Japan have increased by 3.1% compared to the same period last year - the fastest pace in 32 years. Along with rising inflation, this could set the stage for the BOJ to raise rates in May. The BOJ has raised rates 3 times from -0.1% to 0.5%. Any mistake could rock the financial markets. Will central banks continue to print money to escape the next crisis? This is the most important thing to closely monitor," commented the Global Markets Investor account.

Source: Global Markets InvestorIf the Yen strengthens, it could reduce interest in cryptocurrencies in Asia, a key market, as investors shift to safer assets. However, if the BOJ maintains its policy, liquidity may be sustained and support cryptocurrency valuations.

Number of applications for unemployment benefits: A clue about the labor market

On Thursday, data on the number of initial unemployment claims in the U.S. will provide real-time insight into the health of the labor market. After hitting the expected 220,000 claims in the week ending March 8, any increase could raise concerns about economic downturn.

This could push the Fed towards easing measures, a scenario that the bull camp often welcomes. However, if the number of stable or declining aid applications, it may reinforce the Fed's patient stance, keeping pressure on risky assets such as Bitcoin.

Bank of England interest rate decision: Fate of the British pound

The Bank of England (BOE) will announce its interest rate decision on Thursday, concluding a week full of significant economic events for cryptocurrencies. With inflation in the UK still high, investors expect the BOE to maintain the current interest rate. However, the possibility of a surprise interest rate cut cannot be ruled out, especially amid concerns about growth due to tariffs.

A stable pound can help maintain balance in the crypto market in Europe, while a weak pound could stimulate speculative activities.

These events reflect the complex relationship between macroeconomic data and the Bitcoin market as well as cryptocurrencies.

Bitcoin price performance chart | Source: TradingViewWhen Bitcoin fluctuates below $84,000 and altcoins like Ethereum are affected by the strength of the USD and risk sentiment, global investors - especially crypto traders - will closely monitor the economic developments this week to timely adjust their trading strategies.

Disclaimer: This article is for informational purposes only, not investment advice. Investors should do their research before making decisions. We are not responsible for your investment decisions

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