Tensioned week for cryptos: Between inflation and Bitcoin expiration!

In a context of turbulent financial markets, where each macroeconomic event can redefine the balance, the week ahead promises to be crucial for cryptos. Investor attention is focused on key indicators like the PCE Price Index, US Federal Reserve (FOMC) minutes and US GDP revision. At the same time, the imminent expiration of more than $10 billion in Bitcoin and Ethereum options promises to add to the ambient volatility. These dynamics, which combine economic uncertainty and crypto issues, could lastingly shape the financial landscape.

Economic indicators under close surveillance

The imminent publication of the FOMC (Federal Open Market Committee) minutes for November is attracting attention, particularly after recent signals of a possible relaxation of the inflation target to 2%. These discussions, indicative of future American monetary policy, are seen as a potential pivot for the financial markets. The Federal Reserve appears to be adjusting its priorities in response to current economic dynamics. So the minutes, expected on Tuesday, November 26, 2024, could also shed light on the Fed’s stance on interest rates, an important factor for the liquidity of risk assets, including cryptos.

In addition to the minutes, the PCE (Personal Consumption Expenditures) price index for October, expected this Wednesday, September 27, 2024, constitutes another focal point. Expected at 0.2% on a monthly basis and at 2.3% on an annual basis, this indicator will be scrutinized to assess the progression of inflation. Core inflation figures, excluding energy and food, are expected to show an increase of 2.8%, which would signal slight upward pressure. These data, coupled with the revision of US GDP for the third quarter, scheduled for this same Wednesday, will provide an overall overview of the economic health of the United States. They will influence both investor sentiment and the valuation of cryptos.

Volatility announced with the expiration of Bitcoin and Ethereum options

While markets digest economic data, an internal event in the crypto sector threatens to add additional volatility: the expiration of more than $10 billion in Bitcoin and Ethereum options. According to Deribit data, $9.13 billion worth of Bitcoin options will expire on November 29, with a put/call ratio of 0.80. Ethereum options, worth $1.24 billion, show similar dynamics with a put/call ratio of 0.77. These deadlines, which set equilibrium prices (“max pain) to $77,000 for Bitcoin and $2,800 for Ethereum, illustrate the divergent positions in the market.

Such a phenomenon, recurring but amplified in the current context, could cause sudden movements, notably a selloff. “We may see a temporary correction, but the long-term trajectory remains promising», Specifies Peter Brandt, a key figure in Bitcoin trading. The coincidence with a recent rally in major assets, fueled by political events like Donald Trump’s election victory, exacerbates near-term risks and revives optimism about the future robustness of cryptos.

This conjunction of events, between macroeconomic data and dynamics specific to cryptos, puts the markets to the test of increased volatility. The coming days will provide valuable clues about the state of the U.S. economy. In addition, they will test the resilience of investors in the face of fluctuations induced by the expiration of options. As uncertainty persists, one thing is certain: cryptos remain the center of attention, oscillating between a catalyst for growth and a barometer of risk appetite.