Path forward for risky assets, including cryptocurrencies, might be challenging
On-chain analytics firm Santiment has shared on Twitter some important dates that it believes might have an impact on cryptocurrency prices. It wrote: “The schedule of key macro events that will likely have an impact on crypto. As the correlation between digital assets and equities remains tight, these are vitally important dates to keep an eye on.”
🗓️ The schedule of key macro events that will likely have an impact on #crypto. As the correlation between digital assets and #equities remains tight, these are vitally important dates to keep an eye on. 👀 https://t.co/pFlTf8k4kk
— Santiment (@santimentfeed) September 28, 2022
Per Arcane Research, the most important dates are related to the Oct. 13 CPI release and the Nov. 2 FOMC meeting. “BTC’s intraday volatility during last week’s FOMC meeting reached record highs. This shows why it’s worth paying attention to important macro events, and you should already mark the Sept U.S. CPI release on Oct 13 and the next FOMC press conference on Nov 2 in your calendar,” it wrote in Twitter comments.
Per the schedule shared by Santiment, U.S. CPI release dates for the rest of the year are Oct. 13, Nov. 10, and Dec. 13. Meanwhile, the dates for FOMC meetings are Oct. 12 (Fed FOMC meetings), Fed FOMC on Nov. 2 (interest rate decision), Nov. 23 (Fed FOMC minutes) and Dec. 14 Fed FOMC meeting.
The FOMC dates matter as market observers indicate a “high risk” for Bitcoin during FOMC meetings. The Bitcoin dip on Sept. 13 resembled a similar pattern noted around 8-10 days before the FOMC meetings this year (May, June and July), whereby the price trended downward and rose after Fed Chair Jerome Powell’s speech.
While all of the FOMC meetings this year have occurred in a high-risk environment, the most pronounced risk occurred in January. Bitcoin also swiftly dipped in September following the release of CPI data. With the long array of dates indicated above, the path forward for risky assets, including cryptocurrencies, might be challenging.
Generally speaking, traders in traditional markets anticipated the Fed pausing rate hikes next year and to switch to liquidity easing by June 2023. The Fed may have to postpone the scheduled pause and implement a further 75 basis-point interest rate increase before reducing the pace in December and January as inflation persists.