3 things that will move crypto markets in the volatile week ahead

Crypto markets pulled back over the weekend after a Bitcoin-fueled rally last week, with more volatility expected in the coming days.

Tuesday’s US presidential election will cause near-term volatility, as a Trump win is likely to be positive for crypto, while a Harris win will have the opposite effect.

In addition to a new president, there are several key economic reports and a Federal Reserve meeting this week.

Economic events from November 4 to 8

Last week’s crypto market pullback was partially fueled by the latest Core PCE report, which cast a shadow over the outlook for Fed rate cuts.

The October ISM Services PMI report outlining business conditions in the US services sector will be released on Tuesday. These reports are leading economic indicators used by economists and analysts to gain insight into changing economic conditions.

Some jobs and employment reports are expected on Thursday, which also help determine the health of labor markets and overall economic direction.

On Friday there are preliminary readings of the Michigan consumer sentiment index and November consumer inflation expectations. These reports reveal the results of a monthly survey of consumer confidence levels and views on long-term inflationary pressures in the US.

Key events this week:

1. US Presidential Election – Tuesday

2. ISM non-manufacturing PMI data: Tuesday

3. Initial data on unemployment claims – Thursday

4. Fed interest rate decision – Thursday

5. MI Consumer Sentiment Data – Friday

6. ~15% of S&P 500 companies report earnings…

— Kobeissi Letter (@KobeissiLetter) November 3, 2024

The Federal Reserve will make its rate policy decision on Thursday, and analysts overwhelmingly expect a cut of 0.25 basis points. The CME Fed Watch tool estimates this at 98% probability.

Kobeissi’s letter qualified this week as the busiest of the year since the US presidential election will be held on Tuesday, November 5.

“Traders across markets appear to be reducing risk and bracing for more volatility,” Bloomberg reported on Nov. 4, following a slide in tech stocks and cryptocurrencies over the past few days.

“Cryptocurrency traders are divergent on the outcome of the election, with the options market shifting from an aggressive bullish approach to a more hedge-focused approach,” he stated in reference to the derivatives markets.

Crypto market outlook

Markets retreated over the weekend, with total market capitalization down about $50 billion to $2.4 trillion by Monday morning.

Bitcoin sank to $67,570 on Sunday, its lowest level in just over a week. However, Asian traders pushed prices back above $69,000 on Monday morning.

Ethereum was hardest hit, falling to $2,400 before a marginal recovery, and altcoins have been in decline over the past few days as markets brace for more volatility this week.

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