The community is watching 3 key milestones this month that could have a profound impact on the trajectory of the crypto market and the broader macroeconomic environment in the United States this year.
July 13: Consumption and inflation index
On July 4, Michael van de Poppe, CEO and founder of crypto education and consulting platform EightGlobal, said that “all eyes will be on next week’s CPI data” and forecasted a Bitcoin price rally if it crossed the $20,000 level.
The co-founder of The Crypto Academy, known on Twitter as the Wolves of Crypto, said that:
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 crypto demand, as users need to spend more than before.
According to official information, the next CPI release schedule is scheduled for July 13, 2022, and is made 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 above May’s 8.6%.
July 26-27: Fed raises interest rates
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) 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, constraining 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 simply 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, bet on the higher number.
July 28: Is the US in a recession?
On July 28, the U.S. The Bureau 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 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 powerhouse’s economy is officially declared to be in recession (expected to begin in 2023), Bitcoin and the crypto market will face their first full-blown recession and likely further decline with technology stocks.
A little ray of hope?
Despite the bleak macro forecasts, some leading experts consider the recent macro-driven crypto market crash an overall positive sign for the industry.
Expert Erik Voorhees, the co-founder of Coinapult, CEO and founder of ShapeShift, said the current incident is “least worrying” for him, as it is the first incident originating from macro factors outside space.
Alliance DAO core collaborator Qiao Wang made a similar comment, noting that this is the first cycle of bear raging stemming from an “exogenous factor.”
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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