US Economic Calendar in Focus as Bitcoin Loses Recent Gains

• The PCE inflation report comes this week, and analysts say it could have massive impact on Bitcoin, after last week’s CPI report boosted the crypto and stock markets.
• The market is drowning in red, with Ethereum and Solana losing over 4%, while XRP and DOGE dipped over 8%; BTC has lost $40 billion.

Bitcoin has opened the third week of February trading 2% lower for the day to change hands just below $69,000 as the rest of the market bleeds, shedding over $70 billion overnight. It could be a pivotal week for the crypto sector, with the US Federal Reserve set to publish two reports that will set the pace for risk-on assets.

Last week, the Fed published the Consumer Price Index for January, revealing that inflation had cooled to 2.4%, lower than analysts’ expectations and the lowest increase for eight months. Low inflation means that people’s money is not losing value quickly and they may not require to purchase assets that can preserve value better, like BTC. However, it also makes borrowing from banks cheaper, which boosts risk-on assets like BTC and stocks.

This is what happened last week where BTC surged from $65,000 to above $70,000.

This week, the Fed could yet again determine Bitcoin’s trajectory. On Wednesday, the Fed is set to publish the Durable Goods Order report for December, showing how American manufacturers fared at the end of the year. If demand was strong, crypto and stocks could get a sizable boost.

Still on Wednesday, it will also publish the detailed minutes of the Federal Open Market Committee (FOMC)’s meeting in January, showing what Fed officials think about the state of the economy. Analysts say that if the minutes show that the Fed believes inflation is still high or there’s wage growth, they might keep the interest rates high or have fewer rate cuts.

The result is more expensive borrowing, which pushes investors towards safer assets like Treasuries and strengthens the US dollar; both point to tightening liquidity and a subsequent dip in crypto prices.

Analysts Divided on Bitcoin’s Price

Analysts have expressed diverging projections on the Bitcoin price. Some believe that it will continue to rise despite the immediate factors like the Fed reports.

In an interview on FOX Business, renowned bull Anthony Pompliano claimed that the Fed will continue to print money to deal with deflation, but this cannot be sustained in the long term. The result will be a great devaluation of the US dollar, “and Bitcoin becomes more valuable than ever.”

“Bitcoin and gold are great in the long term. The challenge for investors will be whether they can hold an asset when there’s not high inflation on a day-to-day basis. Can you still believe in what the value proposition for Bitcoin is?” he told FOX.

Others believe that BTC is only going downhill. Bloomberg Intelligence’s Mike McGlone warns that the crypto will crash to $10,000, claiming that the “buy the dip mantra” that has propped up its price and brought in more retail investors is now over.

However, as we reported, $860 billion asset manager Bernstein says that the current bear market is an internal ‘crisis of confidence’ and not the sign of a broken market.