- Let’s run through the macro data that came out this week
- And see what news influenced the BTC charts
Every Monday we prepare an economic calendar for readers. It helps to track the mood of investors and predict their actions. Now let’s summarize. Let’s look at the economic week and the market in general perspective.
Friday morning Bitcoin began with a slight rise. But it failed to rise above $27,000 after a difficult roller-coaster week.
The other top 10 cryptocurrencies are trading multidirectionally, but generally sideways. BNB token losses continue. The total capitalization of the cryptocurrency market for the day rose by 0.35% to $1.1 trillion. And daily trading volume fell by more than a third, down 35.3% to $25.9 billion.
Let’s move on to the week’s overall market developments.
Monday. ISM PMI in the U.S. and sentiment in the Eurozone
The U.S. released the ISM Manufacturing PMI – Purchasing Managers Index on June 5. It reflects the mood among service providers. So, in May the index unexpectedly fell by 1.6 points to 50.3 p.p. This was much lower than forecasts (experts were expecting 52.2 p.p.). But the sentiment indicator remains above the important mark of 50 points. This indicates an increase in economic activity in the services sector.
Also, U.S. purchasing managers saw a significant decline in the pre-payment indicators of new orders and paid orders. The latter fell to lows since May 2020. That gives rise to concerns about a slowing economy.
The next important metric Monday was U.S. factory orders. They rose just 0.4% from the previous month. Analysts had expected a bigger increase of 0.8%.
This was the second consecutive drop. The previous orders metric also rose more than originally expected (by 0.6% instead of 0.9%).
Also on Monday came a report from Sentix on economic sentiment in the Eurozone. They worsened in June for the second time in a row. The index fell 3.9 points to -17.0 p.p. Analysts had expected a more moderate drop to -15.1p.p. This suggests growing fears about the economy.
On Monday, however, the market took a storm for another reason. The U.S. began a series of large-scale cryptocurrency crackdowns. They sued Binance US on 11 counts.</nbsp;
The result was a massive withdrawal of funds from the platform and a general panic. On Monday, the capitalization of the crypto market fell by $32 billion. Most coins fell from 5% to 15%. Bitcoin was worth $25,480, Ethereum was $1,804.94.
Tuesday. Data from China and Europe
On June 6, investor sentiment was in decline. First, they were digesting news of lawsuits against Binance and Coinbase. Second, in the global market, players’ appetite was weakened by weak trade data from China. They showed that exports and imports in the world’s second largest economy declined more than expected. For the first time since February, exports fell by 7.5%, although experts had expected a drop of only 0.4%. Import figures were -4.5%.. The reason for the drop in exports was weak global demand for Chinese goods (due to high inflation around the world).</nbsp;
As a result, the growth prospects for the second largest economy have also deteriorated. Which means the Chinese yuan will not weaken the dollar index (which in theory would be good for Bitcoin).
Tuesday was followed by Eurostat data on retail sales. They were in stagnation (0%, not up or down). Economists predicted growth of 0.2 percent.
Investor sentiment was bolstered by the World Bank and its World Economic Outlook report. The organization warned of the fragility of the global economy, as high interest rates could cause problems in low-income countries. Also, the World Bank expects global growth to slow from 3.1% to 2.1% this year.
After all the news, the crypto market continued to fall on Tuesday. Shares of Coinbase and Microstrategy also fell.
Wednesday. Unexpected Canadian Decision, German Problems and OECD Forecasts
On June 7, the Canadian central bank unexpectedly raised the overnight rate to 4.75%.. This was a 22-year high in the history of the country. Experts speculated that Canada would leave rates at previous levels.
Then came the quarterly report from Germany.. It showed that German industry again received fewer orders than expected. And it recorded a decline of 0.4% instead of a 3% growth.
The Ministry of Economy pointed out that development was not weak in all areas.. The automobile and auto parts, as well as chemical products segments are growing. But orders in pharmaceuticals and machinery showed a decline.
Also on Wednesday, the Organization for Economic Cooperation and Development (OECD) released a report. She gave a rather restrained forecast for the global economy. Experts believe the economy is showing some signs of improvement, but the recovery remains weak. The OECD expects global GDP growth of 2.7% this year. That’s much less than last year’s 3.3% growth.
The crypto market was recovering from the previous downturn on Wednesday. Bitcoin was trading at around $26,800 (↑4.21%), ether at $1,870 (↑3.00%). The market “digested” the panic surrounding the lawsuits on Binance and Coinbase. As well as the news that the SEC is demanding the freezing of Binance assets in the U.S.
At the backdrop of the crypto storm, ARK Invest Group funds bought another 419,324 shares of Coinbase worth $21.64 million. They took advantage of the moment when the quotes fell 12%. Just the next day, Coinbase shares were up 2%.
Thursday. U.S. Trade Balance, Labor Market and GDP data in the Eurozone
The important metric that came out yesterday is the U.S. trade balance. It is the difference between the country’s imports and exports. It has been on the downside lately.. According to the latest data, the U.S. foreign trade deficit rose sharply (to -$74.6 billion). But less than experts expected (-$75.2 billion). In the previous month the trade deficit was equal to -$60 billion. The decisive factors of the deficit growth were both reduction of exports and increase of imports.
The US trade deficit has already become a chronic disease, as the country is a typical net importer. This deficit is covered by money from the foreign debt.
The U.S. also presented new labor market reports yesterday. The situation here has deteriorated more than expected. Initial jobless claims rose by 28,000 to 261,000 (analysts were expecting only 235,000 claims.
The initial jobless claims are an important indicator of labor market developments. It has been very resilient recently. So the signs of a cooling in this area are very telling. They are indicative of a slowing economy. For crypto-traders, oddly enough, this is a positive thing. Because amid unemployment, the Fed may stop raising rates.
The Fed’s new decision is due June 14. U.S. interest rates are now between 5% and 5.25%, the highest since 2006.
The CME FedWatch tool predicts a 74.8% chance that the Fed will leave rates unchanged. And a 25.2% chance that the rate will rise by 25 bps on June 14.
Eurozone GDP data also came out yesterday. Volumes fell by 0.1 p.p.. in the first quarter of 2023. Economists speak of a technical recession. This happens when output declines for two quarters in a row (Eurozone GDP also fell in Q4).
Germany was the hardest hit by the drop in GDP – its output fell by 0.3%. This happened because of last year’s increase in energy prices in the country, which had a strong impact on consumer spending. As a result, household spending in Germany succumbed to inflationary pressures. This, in turn, affected the entire euro zone.
This kind of performance is not good for the crypto market. After all, a weak euro means a strong dollar (Bitcoin’s main competitor).
The main headliner of yesterday’s sentiment among crypto traders was the SEC and their victims. The Commission filed a new lawsuit against U.S. platform Binance. It details transactions worth billions of dollars. According to the SEC, the exchange moved customer funds through the now-defunct Silvergate Bank and Signature Bank. The suit also says that Binance bought yachts ($11 million), airplanes ($55 million) and transferred $62.5 million to its CEO with customer funds. CZ itself denies the allegations.
By yesterday, bitcoin was trading virtually unchanged at around $26400.
Friday. Inflation in China
This morning began with a string of news from China. First came the updated consumer price index. It was lower than forecasted (0.2% instead of 0.3%).. Thus, inflation remains close to zero. That gives the central bank plenty of room to stimulate the economy.
China’s state banks also said they are cutting deposit rates to support the economy.
American crypto traders are not in the best mood today. In fact, Binance.US is suspending dollar deposits as of June 13. They attributed this to a desire to “protect customers” amid increasing regulatory pressure. The U.S. platform added that from next week it will also delist trading pairs with the dollar, but will continue to support steblecoin pairs.
Meanwhile, trading volume on centralized exchanges has fallen to a four-year low. It is down 15% this month. This was reported by CCData analysts in their latest report. Spot trading and derivatives trading were primarily analyzed. Spot trades are down more than 20%. They are now at a four-year low (just under $500 billion). The largest cryptocurrency exchange, Binance, saw the biggest drop.
This is the end of the trading week. Don’t miss our new economic calendar on Monday. Also don’t forget to follow the latest news on our website. Have a great weekend everyone!
You all enjoy the weekend.