Crypto News: 4 Economic Factors That Could Drive Bitcoin Sentiment This Week

• Donald Trump’s inauguration on January 20 has sparked speculation within the crypto community about potential Bitcoin price movements.
• Key events this week include U.S. jobless claims data, the Bank of Japan’s interest rate decision on January 24, and the U.S. consumer sentiment report.

The crypto market is preparing for a critical week as investors and traders gear up for major macroeconomic developments. Bitcoin price performance will most likely depend on a mix of regulatory changes, labor market data, and global monetary policy announcements.

Currently, the level of $100,000 marks an important psychological and technical line for Bitcoin price. It appears that the BTC price will stay above this point as it trades at $107,803.07, marking a 2.74% increase on Monday, January 20, as detailed in our previous article. 

Trump Inauguration Brings Speculations About Bitcoin Rally

The inauguration ceremony of Donald Trump on January 20, which falls on Martin Luther King Jr. Day in the U.S., has sparked interest within the crypto community. While U.S. markets are closed for the holiday, the event is expected to have an impact when trading resumes.

Trump, who campaigned on a platform advocating for lighter regulatory oversight, has committed to signing several executive orders aimed at fostering industry growth. This stance has heightened expectations of regulatory changes favorable to crypto, as previously mentioned in our report. 

Nonetheless, this event fueled mixed feelings in the minds of market participants. “This Trump inauguration is either a huge sell-the-news or that’s a total mid-curve, and of course, we are going higher,” said one market observer.

Labor Market Indicators

Initial jobless claims data coming out on Thursday will give important clues about labor market health across the United States. The prior report had it increasing to 217,000 filings for the period ended January 10, breaking above the comparison of 203,000 last time. When this trend accelerates, perhaps it presents a weakening trend in the US labor market, the reason for trimmed consumer spending and, hence, for consumption.

Higher unemployment levels are linked with reduced disposable income, which is known to lower investments in risk assets like Bitcoin. Thus, investors are keeping a close eye on this figure.

Focus On Bank of Japan’s Decision

This week will also see the interest rate decision by the Bank of Japan on January 24. Speculations hint at a rate hike, which may disrupt liquidity conditions worldwide. Economists expect an increase in rates, which may pressure carry trades and other financial strategies.

“If they hike rates (and they might), global markets are going to feel it. Crypto included,” a user shared on X. Another analyst suggested the decision might overshadow the impact of Trump’s inauguration. They stated, “Everyone’s attention is on the Trump inauguration for the next major market move, when in reality, the bigger force to consider is the potential BOJ interest rate hike.”

Bitcoin price has always been sensitive to the global liquidity dynamics. A rate hike by the BOJ may trigger a ripple effect in the markets, with risk assets like BTC getting the most significant blow.

Consumer Sentiment In Focus

On Friday, the U.S. consumer sentiment report will give an idea of how the public perceives the economy. This data is an important indicator of investment behavior. Positive sentiment could support further investment in Bitcoin, while negative sentiment might force investors to shift to safer assets.