US Crypto Market Braces for Transformation This Week as Key Events Loom

The US crypto market is set for transformation this week, with some key events on the horizon. Current sentiments in the market appear tempered, so investors are watching to see the price direction of cryptocurrencies.

The US crypto market is set for transformation this week, with some key events on the horizon. Current sentiments in the market appear tempered, so investors are watching to see the price direction of cryptocurrencies. Specifically, Bitcoin (BTC), the world’s largest cryptocurrency, is trading below $70,000, with prospects for a price recovery in the fourth quarter of 2024.

Here are the three major events that may affect Bitcoin’s price this week:

US Presidential Election and Bitcoin Outlook

The US market is gearing up for the Presidential election between Donald Trump and Kamala K. Harris on Tuesday, November 5. With only a few hours left for the showdown, Polymarket data reveals that Trump is leading by a narrow margin. Kalshi, Polymarket’s industry peer in the prediction market, displays a similar gap, with Trump ahead by 53.1% compared to Harris’ 46.9%.

The outcome of the upcoming election could greatly impact crypto regulation, investor sentiments, and economic policy. The winner may influence crypto policies, which invariably impact the price of Bitcoin and other digital assets.

As CNF reported, Ripple’s CEO Brad Garlinghouse has expressed optimism regarding crypto regulation development following the US election. Irrespective of the victor, Garlighouse is hopeful for a major crypto reset.

Mark Cullen, an analyst at AlphaBTC, said he is anticipating heightened volatility in the market this week. “The Key day will be Tuesday, as the US election voting comes to a close. If there is no clear winner as the day progresses, it could get quite scary for Bitcoin,” Cullen noted.

FOMC Announcement and Jerome Powell Speech

Additionally, the Federal Open Market Committee (FOMC) will release minutes from its last meeting on Thursday. Shortly after, Federal Reserves Chairman Jerome Powell will issue comments. Any unexpected statements or actions from the Federal Reserve regarding interest rates or monetary policy could upset markets.

The Federal Reserve has some difficult choices in light of last week’s jobs data. The Fed is tasked with keeping inflation, as measured by the Consumer Price Index (CPI), at 2% annually and sustaining full employment. The FOMC's November meeting is slated for this Wednesday and Thursday, and economists are speculating about another rate cut.

At the previous meeting, the Fed cut interest rates by 50 basis points (0.5%) as the US CPI fell to 2.4%. Another rate cut seems likely as unemployment has risen from 3.7% to 4.1% this year. However, inflation is now close to the Fed’s 2% target.

FOMC’s September prediction suggests the federal funds rate may drop by an additional 50 basis points before the end of 2024. In the meantime, Powell said the downside risks to employment have increased, hinting at more rate cuts to boost economic growth.

A potential rate court can boost market liquidity, encouraging investors to devote more capital to riskier asset classes like Bitcoin.

Initial Jobless Claims

The crypto market also monitors the initial jobless claims due on Thursday, November 7. This economic data helps to determine the tightness or softness of the labor market in the US.

Last week, new applications for unemployment insurance from US citizens came in at 216,000 for the week ending October 25. This marks a substantial decrease from the 228,000 recorded in the previous week. Nevertheless, this is still higher than the consensual estimate of 220,000 exists.

High initial jobless claims in the Thursday report suggest a weakening labor market and increasing economic hardship. This might result in less money being spent by consumers and less being invested in conventional assets like stocks and bonds. As a result, some investors may turn to alternative assets like Bitcoin as a hedge against economic uncertainty.

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