Top events to watch next week

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The cryptocurrency industry continues to struggle with the aftermath of FTX’s collapse, and its flagship asset – Bitcoin (BTC) – is not making any significant moves in either direction, but that could change depending on these events at come next week.

Namely, the new U.S. Consumer Price Index (CPI) report is due out on December 13, while the Federal Open Market Committee (FOMC) meeting, where the agency will discuss possible interest rate hikes, conclude on December 14.

The results of these events could have a large effect on the price of Bitcoin. Specifically, the CPI report, released by the Bureau of Labor Statistics, will show the changes in inflation data or the recorded rise in consumer prices during the month of November.

Macroeconomic Effects on Bitcoin

If the CPI data were to be elevated, it could put additional pressure on the price of Bitcoin, as happened in June, when the CPI inflation figures for May were the highest since. November 1981 and Bitcoin erased $15 billion from its market capitalization in just ten minutes.

However, if it is lower than expected, as it was in the previous month, Bitcoin could finally get the necessary momentum to rally. Indeed, after previous October CPI data fell to an all-time low, Bitcoin reacted by adding $15 billion to its market capitalization in just 15 minutes. A similar thing happened in August when the crypto market added over $50 billion in an hour on favorable CPI data.

Meanwhile, interest rate increases by the Federal Reserve (Fed) could put pressure on the stock market, and given the correlation between crypto and stocks, this could also have an adverse effect on Bitcoin.

On the other hand, if the Fed slows its action on interest rates, it could make equities more attractive as an investment and push the crypto markets as well.

According to financial analyst Seth_fin, the CPI data could represent an increase in inflation of 7.4 points, with a change of 0.2, as he predicts an FOMC rate hike of 50 basis points (BPS) or 0.5%, which he says is acceptable for Bitcoin.

Historical Bitcoin price vs. inflation data. Source: Seth_finBitcoin Price Analysis

At press time, Bitcoin is trading at a price of $16,846, which demonstrates a slight increase of 0.02% on the day but still a decline of 1.39% from the previous seven days, adding down 13.16% over the month.

7-day Bitcoin price chart. Source: Finbold

With a market capitalization of $323.92 billion, the flagship decentralized finance (DeFi) asset remains the largest cryptocurrency by this metric, according to data from CoinMarketCap retrieved Dec. 8.

Disclaimer: The content of this site should not be considered investment advice. The investment is speculative. When you invest, your capital is at risk.

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