Crypto Watch: Powell's Rate Cut Caution Dominates Key Events This Week

During his 60 Minutes interview, Jerome Powell, Chair of the U.S. Federal Reserve (Fed), underscored the central bank’s increased wariness regarding potential rate cuts. This caution has heightened in light of recent economic data.

Powell emphasized the ongoing strength of the U.S. economy, stating that the Federal Open Market Committee (FOMC) requires more tangible proof of inflation retreating to the 2% mark.

He dispelled the notion that Fed rate cuts are contingent upon reaching the 2% target. In response to these developments, cryptocurrency and Bitcoin traders closely monitor cues from the Fed’s stance on rate cuts as they consider re-entering the crypto market.

This upcoming week holds significant importance for cryptocurrency investors, with a series of pivotal crypto-related and macro events scheduled to unfold.

Nayib Bukele, a staunch supporter of Bitcoin, secures a renewed term as El Salvador’s President, underscoring his unwavering dedication to the cryptocurrency. This victory reinforces his focus on accumulating BTC and advancing initiatives such as the Bitcoin-based Freedom Visa and Citizen program.

Today, the People’s Bank of China moved by reducing banks’ reserve ratio requirements (RRR) by 50 bps. As a result, China’s CSI 1000 index dropped by 8% in just a few hours, leading to a trading halt for 30% of stocks on the exchange. This happened amidst various measures China took to boost the economy, including a short-selling ban and other policies to stabilize the market.

Crypto Market Highlights: U.S. Events

Moreover, watch out for some big happenings this week in the U.S. On Monday, check the S&P Services PMI data. Then, on Tuesday, watch the ISM Non-Manufacturing PMI data. Wednesday brings a 10-year Treasury Note auction, and on Thursday, take advantage of the Initial Jobless Claims report. Adding to the excitement, 20% of S&P 500 companies will share their earnings. Brace yourself for potential market ups and downs as things heat up.

Traders are eagerly eyeing Fed officials’ speeches this week for important signals. FOMC members Raphael Bostic, Loretta Mester, Adriana Kugler, Thomas Barkin, and Michelle Bowman are scheduled to speak. Austan Goolsbee and Bowman from the Federal Reserve Bank of Chicago have already opposed expectations of a rate cut in May or June.

The upcoming announcement from the U.S. Securities and Exchange Commission (SEC) regarding the Invesco Galaxy spot Ether ETF is eagerly anticipated on Feb 6. However, Market observers, including Standard Chartered and Bloomberg ETF analyst Eric Balchunas, are closely monitoring this decision, with optimistic expectations for the approval of an Ether ETF in May.

This week, some big things are happening. Polygon (MATIC) will be boosted with the Etrog upgrade on Tuesday. Then, on Wednesday, Horizen (ZEN) will level up with its mainnet upgrade. So, keep an eye out for these important changes!

However, The Hong Kong Securities and Futures Commission (SFC) might give the green light to Harvest Hong Kong’s spot Bitcoin ETF application on Feb 9. If approved, the Spot Bitcoin ETF is anticipated to kick off right after the Chinese New Year on Feb 10.

The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.