1. Donald Trump’s Inauguration
On Monday, January 20, U.S. markets are closed in observance of Martin Luther King Jr. Day, but the inauguration of Donald Trump is more significant—at least for cryptocurrency investors.
Proponents of cryptocurrency are feeling hopeful after Trump’s return to the White House. Trump pledged to lower regulatory hurdles and implement measures that would support cryptocurrencies during his campaign. If his administration follows through, it could foster positive sentiment toward Bitcoin and other digital assets.
With markets closed for the holiday, though, any immediate impact on Bitcoin trading probably waits for Tuesday. While some investors remain optimistic, others sound a note of caution as policy decisions may be in store any day now.
2. US Initial Jobless Claims
US labour market health will continue to be under the spotlight with initial jobless claims set for Thursday. It is a count of the number of Americans filing for unemployment benefits for the first time.
Claims rose to 217,000 in the prior report, beating expectations and reflecting a weakening labor market. If this is to continue, it might indicate continued economic distress. This typically means a weak labor market reduces consumer spending, which trickles down through financial markets and into cryptocurrencies.
Here’s how jobless claims may affect Bitcoin:
- Higher Claims: Indicate increased unemployment, reducing disposable income and investments in Bitcoin.
- Lower Claims: Suggest economic recovery, potentially boosting confidence in risk assets like cryptocurrencies.
3. Bank of Japan Rate Decision
The Bank of Japan (BOJ) is set to announce its interest rate decision and economic outlook on January 24. This decision is closely watched as it may influence global liquidity and financial strategies.
A potential rate hike by the BOJ could disrupt the yen carry trade, where investors borrow yen at low rates to invest in higher-yielding assets. A disruption in this strategy could lead to reduced liquidity for risk assets like Bitcoin.
Key considerations regarding the BOJ decision:
- Rate Hike: May increase global financial pressures, potentially leading to a sell-off of risk assets, including Bitcoin.
- No Change: Could sustain current liquidity levels, maintaining Bitcoin’s appeal as a risk asset.
The BOJ’s decision may carry more weight than other events this week, given its potential global financial implications.
4. US Consumer Sentiment Report
On Friday, the US consumer sentiment report will offer a snapshot of public confidence in the economy. This metric reflects how consumers feel about their finances and the economic outlook.
Consumer sentiment’s potential impact on Bitcoin:
- Positive Sentiment: May increase spending and investment in assets like Bitcoin.
- Negative Sentiment: Could drive investors toward safe-haven assets, reducing Bitcoin’s demand.
Summary of Key Events and Potential Impacts
|
Event |
Date |
Potential Impact on Bitcoin |
|
Donald Trump’s Inauguration |
January 20 (Monday) |
Pro-crypto policies may boost sentiment; market response likely delayed due to holiday. |
|
Initial Jobless Claims |
January 25 (Thursday) |
Higher claims may weaken sentiment; lower claims could boost confidence in risk assets. |
|
BOJ Rate Decision |
January 24 (Wednesday) |
A rate hike may disrupt global liquidity, leading to risk asset sell-offs, including Bitcoin. |
|
Consumer Sentiment Report |
January 26 (Friday) |
Positive sentiment may drive investment in Bitcoin, while negative sentiment could reduce its demand. |
At the time of writing, Bitcoin changes hands at $107,353. Traders are cautioned to pay close attention to these events as outcomes might create volatility in the price of cryptocurrencies.
