- We have compiled the key macro data that was released this week
- It is useful for a broader picture of the economy
- And for evaluating the BTC market
Every Monday we prepare an economic calendar for readers. It helps to monitor investor sentiment and predict their actions. Now let’s summarize. Let’s look at the economic week and the market in general perspective.
What’s happening with bitcoin
The major cryptocurrency lost about 2.45% in 7 days. At the same time all week BTC was trading above the level of $30 ths.. and felt quite confident at the $31,000 mark. The main losses came yesterday after the publication of unexpectedly strong economic data from the U.S. (read more in the “Thursday” section). They strengthened the strength of the dollar. And also increased the chances of further rate hikes and market lull.
Yet, long-term investors continue to maintain their optimism after a number of traditional financial institutions showed interest in opening their bitcoin-ETF.
In addition, this week the head of BlackRock called bitcoin an international asset and “digital gold.”. This has increased confidence that BlackRock will not give up its fight for the right to launch an ETF.
Other important data:
- Bitcoin has dominated institutional fund flows for a second week, according to CoinShares. These volumes totaled $124.7 million.. Germany leads in cryptocurrency inflows ($64.8 million), followed by (Canada with $34.7 million).
- Interestingly, Ethereum-based investment products have not generated much interest: inflows of only $2.7 million, while multi-asset funds received outflows of $1.8 million.
- Bitcoin miners have sent 54,000 BTC to Binance in the past 3 weeks. This raises concerns about a potential sell-off.
- After BlackRock filed for a bitcoin-ETF, BTC rose more than 20%, leading to an increase in inflows from miners trading on exchanges.
- The difficulty of mining BTC declined last week. In recent months, this metric has grown mainly because the hashing speed (computing power of the network) has increased. But in the last 14 days the average hash rate has dropped to 362.5 hashes per second (EH/s). Complexity, in turn, fell 3.26% to 50.65 Tl.
- There’s also another important change – bitcoin’s correlation with the stock market has dropped to nearly zero.
- And miners earned $184 million in commissions in Q2 of the year. Mostly due to the popularity of BRC-20 and the growth of the cryptocurrency itself.
A number of other important processes are going on in parallel in the world. They affected the market in one way or another.
The Monday. U.S. industrial sentiment
On the first day of the week, the U.S. released the ISM manufacturing activity index. It came in below expectations, with the ISM manufacturing PMI dropping from 46.9 to 46, despite expectations of a modest rise to 47.2. This is the lowest level since May 2020. At the same time, the employment figure fell from 51.4 to 48.1. The dollar index (DXY) temporarily bottomed locally on this news.
Tuesday. China and Europe metrics
China released its services purchasing managers’ index (PMI). It fell to 53.9 in June (the previous month was up to 57.1). That reinforces fears of a recession.
At the same time, the U.S. has declared a technological war on China – it wants to ban the supply of certain chips in order to maintain its supremacy. Analysts fear that the growing tensions between the countries will lead to a further downturn in the global economy. But they have serious hopes for U.S. Treasury Chief Janet Yellen’s visit to China.
Also on Tuesday came fresh data from the Eurozone. According to S&P Global, the Purchasing Managers’ Index fell 2.9 p.p. to 49.9 p.p. in June.. On the same day, experts at Citigroup lowered its forecast for Eurozone economic growth in 2023 – economists now believe that the region’s real GDP will be 0.8% this year, down from their previous forecast of 0.3%.
Wednesday. Fed minutes and important metrics
The U.S. Census Bureau released several important reports on July 5. They showed that new orders for manufactured goods rose $1.6 billion, or 0.3 percent, to $578 billion in May.</nbsp;
The minutes of the June FOMC meeting were also released Wednesday.. It showed that almost all members of the Committee were unanimous in the decision to keep the rates at the same level. At the same time, officials plan to increase the rate at the next meetings this year. Fed staff predicts a moderate slowdown in the U.S. economy by the end of this year. It will be followed by a moderate recovery in 2024.
In Europe, meanwhile, the producer price index (PPI) fell for the first time since March 2020.. They decreased by 1.5%. Previously, the maximum prominflation of 40% was recorded last summer.. The price increase was due to the first shock of the war in Ukraine.
Thursday. Strong macro data from the U.S.
The APD analysis center yesterday presented the National Employment Report for the U.S.. It showed an increase in jobs and wages in the private sector. Reuters reported Thursday that wage growth was more than double analysts’ forecasts (497,000 vs. 228,000). Which means the labor market was not affected by the Fed’s monetary tightening campaign.
Further successful data was shared by the Institute for Supply Management. U.S. Services Purchasing Managers’ Index (PMI) rose to 53.9 in June, well above the forecast of 51. A metric above 50 indicates service sector growth, below 50 a contraction.
The strong data reinforced fears that the Fed will continue its tactic of raising rates and keeping them high for a longer period of time to fight inflation. This forces investors to get rid of risky assets. As a result, we see that BTC exchange rate fell almost 3% during the day.
Friday
Today started with the data from Germany. Production here fell 0.2% in May (analysts expected the metric to be unchanged).
Bitcoin has rebounded from yesterday’s drop to above the $30,000 level.. The release of the Nonfarm Payrolls report in the U.S. will be decisive. If the economy shows strong data again, we can expect short-term volatility in the market.
This is the end of the trading week. If you like an enjoyable and useful weekend read, you might like to read Arthur Hayes’ new essay. In it, he writes about the prospects of artificial intelligence and links them to the growth of bitcoin.