Bitcoin Faces a Crucial Week: These US Events Could Decide BTC’s Next Big Move

Following last Friday’s strong US jobs report and the subsequent odd increase in expectations for an upcoming Fed rate hike, risk-on assets are entering the final week before the crucial FOMC meeting scheduled for September 15-16.

In the coming days, inflation data is likely to determine whether BTC continues its recovery or faces another major correction.

Big Week Ahead

Monday is expected to be an uneventful day since the US financial markets are closed on Labor Day. There are no major events scheduled for Tuesday, while the 10-Year US Note Auction on Wednesday is unlikely to impact crypto. The first major test comes on Thursday, with the release of the August PPI data, which measures inflation at the producer level.

Economists expect headline PPI to rise 0.4% month-over-month, compared with no actual increase in July. The core PPI is forecast at 0.3%. Annual producer inflation is likely to accelerate from 4.7% to 5.4%. A hotter reading could reinforce expectations that inflationary pressure is rebuilding, particularly as oil prices remain elevated due to the resumed conflict in the Middle East.

Friday will be an even more important day for all financial markets, especially risk-on alternatives like crypto. The CPI report goes live, which is estimated to point to inflation remaining at around 3.3%-3.4% annually, while core CPI is expected to ease from July’s 2.5%. The actual results could have a significant and immediate impact on Fed rate-hike expectations.

Once again, a higher-than-expected CPI reading would strengthen the argument for another rate increase and could pressure BTC while pushing Treasury yields higher, and vice versa.

Key Events This Week:

1. US Markets Closed, Labor Day – Monday

2. US 10Y Note Auction – Wednesday

3. August PPI Inflation data – Thursday

4. August Existing Home Sales data – Thursday

5. August CPI Inflation data – Friday

6. September MI Inflation Expectations data -…

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Last Week Before FOMC

Given the hawkish stance taken by Fed Chair Kevin Warsh at the end of August and the strong US jobs report from last Friday, the inflation data coming in the following days will be crucial in determining the central bank’s next move. That move will come on September 16, making this week’s data even more important.

Bitcoin reacted to the hawkish speech by Warsh and the jobs report with an immediate leg down that drove it south by $2,000-$3,000 in hours. It managed to stabilize at around $80,000 even as bearish news and expectations mount, but a higher CPI reading is unlikely to help its bullish case ahead of the FOMC meeting, especially since the odds for a rate hike are well over 50%.