Volatility expected to remain stable this week, cryptocurrency market awaits direction of U.S. economic winds

It’s another busy week on the U.S. economic calendar. The cryptocurrency market has returned to consolidation, but will volatility increase this week?

The economic highlights this week are the minutes from the Federal Reserve meeting and a key earnings report from semiconductor giant Nvidia.

There are also reports on global manufacturing and services indexes and consumer inflation expectations, which may have some impact on the market.

Economic Schedule from May 20th to 24th

Last week, the U.S. Dow Jones Industrial Average (DJIA) exceeded the 40,000-point mark for the first time. Stock market gains were boosted by favorable numbers in the CPI report, which fueled speculation that the U.S. economy is cooling and that the central bank could cut interest rates in the coming months.

This Wednesday, the market will usher in the release of the minutes of the Federal Reserve's FOMC meeting in May. The minutes are expected to provide investors with more information and insights into the future direction of monetary policy and possible interest rate cut schedules.

On Thursday, a preliminary report on the global manufacturing PMI for May will be released, capturing business conditions in the manufacturing industry.

On May 23, the PMI report related to the service industry will be released. This report is an important economic leading indicator. The service industry occupies a pivotal position in the U.S. economy, contributing more than 70% to GDP, so this report can reflect the latest changes in the economic situation.

On Friday, we will see the Michigan Consumer Sentiment Index for May, which measures inflation expectations. The reports chart the results of monthly surveys on consumer confidence levels in the country.

Semiconductor giant Nvidia also has a much-anticipated quarterly earnings report on Wednesday that could keep tech stocks and cryptocurrencies rising.

The media "Kobeissi Letter" pointed out this difference in market views in a comment on May 19:

"Bulls believe that Nvidia's stock price will continue its upward momentum and break through its all-time high, while bears believe that the stock price has reached its peak and will fall next."

Asian stock markets edged higher on Monday, May 20, in line with gains on Wall Street. Investors in the region are eagerly awaiting the release of a number of key economic indicators this week, including Japan's inflation data and South Korea's interest rate decision.

Cryptocurrency Market Impact

With no major economic events this week, the cryptocurrency market is unlikely to be significantly affected and volatility is likely to remain low.

Cryptocurrency markets got a boost last week, with total market capitalization exceeding $2.5 trillion, and maintained gains over the weekend. However, they have fallen slightly over the past 24 hours, down 1.2%.

Bitcoin fell to an intraday low of $66,000 but found support there and recovered to $67,000 at the time of writing during Monday morning’s Asian trading session.

Ethereum fell 1.3% on the day, back to $3,078, after reaching a high of $3,142 over the weekend. Altcoins were broadly lower on Monday morning.

Conclusion:

This week, although the U.S. economic schedule is full, the cryptocurrency market is not expected to be greatly affected, and market volatility is likely to remain stable. Although the total cryptocurrency market capitalization exceeded the $2.5 trillion mark last week, the market has seen a slight correction in the short term. Major cryptocurrencies such as Bitcoin and Ethereum have experienced some degree of price volatility, but overall market sentiment remains positive.

Investors will continue to pay attention to the minutes of the Federal Reserve's FOMC meeting and earnings reports from important companies such as Nvidia, as well as key economic indicators such as the global manufacturing and services PMI index. Although these factors may have some impact on traditional markets, their impact on the cryptocurrency market is expected to be limited.

As the cryptocurrency market matures and the global economic environment changes, investors should remain cautiously optimistic and pay close attention to market dynamics and macroeconomic indicators to make informed investment decisions. At the same time, the unique and decentralized nature of the cryptocurrency market means that its price fluctuations may be more affected by factors within the industry and technological innovation. Therefore, market participants need to consider multiple aspects of information to grasp the development trend of the cryptocurrency market.

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