Why could Bitcoin fluctuate so much again on Monday and Friday?

Bitcoin (BTC) appears to be in a consolidation phase and continues to rise around $70,000.

Last week, the prevailing macro order was once again confirmed: US GDP for the fourth quarter of 2023 came in higher than expected and the number of unemployment claims was actually lower. The economy and labor market appear strong.

Moreover, core personal consumption expenditures inflation, the US central bank's preferred measure of inflation, reached 2.8%, exactly as expected.

What does all this mean for the price of Bitcoin and what can we expect from next week in macroeconomic terms?

Inflation remains a risk

As you know, January and February showed that inflation in America was still slightly higher than expected. As a result, the central bank cannot yet start lowering interest rates, which is important for the price of Bitcoin.

The reason for the upward pressure on inflation lies, among other things, in compensation for American workers, which remains at an increasing level due to the tight labor market.

The growing pressure on wages in America is having a direct impact on inflation, making it unlikely to fall towards the desired 2.0 percent in 2024.

In particular, inflation in the US services sector (red) remains high at the moment, leaving the US central bank struggling to control inflation.

Right now, this appears to be the main factor in the lack of interest rate cuts in America.

Next Monday and Friday are important for the Bitcoin price

Monday looks to be a crucial day for Bitcoin price next week.

In the above macroeconomic overview for next week, we see the ISM polls showing on Monday. These are questionnaires completed by key parties within the sectors involved, which provide an insight into the health of the industry.

It also contains information about the prices faced by purchasing managers within the industry, which can give us important insights into inflation. We may start the trading week on a volatile note on Monday.

Then on Friday we get Change in nonfarm payrolls (NFP), which tells us more about the health of the US labor market and could also lead to a volatile end to the week.

Lots of fireworks planned for next week!

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