- Last week, increased regulations targeting the digital asset industry negatively impacted investor sentiment, and Binance news dominated the media.
- Minutes from the FOMC meeting, ADP nonfarm payrolls change, and ISM Non-Manufacturing PMI statistics in the U.S. strengthened bets on consecutive interest rate hikes by the Fed in July and September.
- This week, the Consumer Price Index (CPI) will serve as a leading indicator of U.S. economic data, keeping macroeconomic analysts busy.
Bitcoin investors struggled against concerns of a looming recession and the Fed’s hawkish rhetoric last week. So, what can investors expect this week?
What Happened Last Week?
To look ahead, let’s look back. Increased regulations targeting the digital asset industry negatively impacted investor sentiment, and Binance news dominated the media last week. Investors grappled with the impact of central bank monetary policy on the global economy, and concerns over a recession, leading to a challenging week due to the Fed’s tough meeting minutes and U.S. economic indicators.
Minutes from the FOMC meeting, ADP nonfarm payrolls change, and ISM Non-Manufacturing PMI statistics in the U.S. strengthened bets on consecutive interest rate hikes by the Fed in July and September. Rising borrowing costs contributed to losses throughout the week. The U.S. Employment Report did not have a significant impact on Fed fears.
The Nasdaq Composite Index also declined, and the latest economic data in the U.S. indicated a possibility of interest rate hikes in July, ahead of the U.S. CPI Report scheduled for release on Tuesday. According to CME FedWatch data, the probability of a 25 basis point Fed rate hike in July increased to 93% from the previous week. Additionally, the likelihood of the Fed raising rates to 5.75% in September rose to 24.2% from the previous week.
The excitement that began at the end of June faded in the first week of July. News of resubmitted applications from Blackrock Inc., Fidelity, and others was positively received by the markets, but uncertainty remains regarding which ones the SEC will approve.
What Should Crypto Investors Expect This Week?
This week, the Consumer Price Index (CPI) will serve as a leading indicator of U.S. economic data, keeping macroeconomic analysts busy. If the CPI shows a decrease in inflation for July, the Fed’s tightening policy may be slightly eased.
Following last month’s interest rate hike, markets are almost unanimous in expecting rates to rise again, and the potential for last-minute uncertainty due to data that goes against the trend is likely. The Consumer Price Index (CPI) will be followed by the Producer Price Index (PPI) on Wednesday, and eight Fed officials will make statements on the economy and monetary policy.
Latest Developments in Bitcoin Mining
In a positive change, the fundamental indicators of the Bitcoin network are poised to reach new all-time highs in the next few days. According to the latest estimates, network difficulty will increase by over 5%, marking the largest single increase since the end of March.
This is significant as it indicates ongoing competition in the mining industry and growing confidence in future profitability, despite the lack of price movement. The difficulty will balance out its previous drop and reach approximately 53.2 trillion, the all-time high.
According to some estimates, the hash rate has recently surpassed the 400 exahashes per second (EH/s) threshold for the first time. Bitcoin’s price remains over 50% lower than its peak in 2021, adding credibility to the old saying, “price follows hash rate.”
