Crucial US Economic Reports May Influence Bitcoin Ahead of Thanksgiving

Bitcoin is entering a pivotal week as three delayed US economic reports are scheduled to be released just before Thanksgiving, which could reshape investors' expectations for Federal Reserve policy andhave an impact on crypto markets.

Key Takeaways

Bitcoin faces a significant week with three crucial US economic reports likely to impact market expectations and Federal Reserve policy.
The delayed economic data includes September retail sales, the Producer Price Index, and initial jobless claims, each of which can influence Bitcoin prices.
Markets currently anticipate December rate cuts at approximately 70%, but new data could shift this outlook.
Higher retail sales or PPI figures may lead to speculation about tightening economic conditions, while lower figures could support expectations for continued monetary easing.
The combination of these reports and market dynamics makes this week a critical period for Bitcoin and broader cryptocurrency trends.

This week is particularly critical for investors as these economic indicators come at a time when the probability of a rate cut in December is approaching 70%. Bitcoin has been notably sensitive to shifts in macroeconomic conditions, making these announcements highly significant.

Increased Attention on Delayed US Economic Data

The recent 43-day US government shutdown resulted in a backlog of essential economic indicators, leading to multiple key reports being released simultaneously.

Upcoming US Economic Reports

According to MarketWatch’s economic calendar, on Tuesday, November 25, at 8:30 AM ET, two important reports will be released: September retail sales and the Producer Price Index (PPI). On Wednesday, initial jobless claims data will be available.

These reports are particularly important because the markets currently lack timely metrics on consumer spending and inflation. The previous retail sales report indicated a strong monthly gain of 0.6%, while the PPI showed a decline of 0.1% in August. On a year-over-year basis, the core PPI was recorded at 2.8%, which serves as a reference for wholesale inflation trends.

For the September retail sales report, the consensus anticipates a modest 0.3% month-over-month increase. If the actual figure falls short, it could indicate a cooling economy, possibly leading to a more dovish outlook from Federal Reserve officials. Weak consumer spending is often linked to growing speculation around rate cuts, which can weaken the dollar and potentially bolster cryptocurrency prices.

Recent market activities illustrate this trend. Bitcoin recently hit seven-month lows after robust US job data diminished expectations for rate cuts, leading to nearly $1 billion in outflows from spot Bitcoin ETFs—the second-largest recorded outflow. This event highlights how labor market strength can influence crypto positioning.

Spot BTC ETFs saw significant outflows during this period.

The release of the PPI is vital as it represents the last major inflation data before the October Personal Consumption Expenditures report. Markets currently factor in about a 67.3% chance of a December rate cut, but this outlook may change with the new data.

A PPI figure that is higher than expected, particularly in core measures that exclude food and energy prices, could alter these expectations significantly. If core wholesale inflation increases, traders might lower the odds of a December cut to below 60%, strengthening the dollar and applying pressure on cryptocurrency.

For September, expectations for the PPI indicate a 0.3% monthly increase. Any higher figure could challenge the perception of easing price pressures, while a lower reading would align with expectations for continued monetary adjustments.

Initial Jobless Claims Could Trigger Holiday Volatility

On Wednesday, the initial jobless claims report will provide an update on the labor market just before the Thanksgiving holiday. Analysts predict that there will be 225,000 new claims for the week ending November 22, slightly up from 220,000 prior.

The latest jobless claims report suggests that while the labor market remains stable, it is showing signs of gradual cooling. The seasonally adjusted initial claims decreased by 8,000 to 220,000, against a consensus that likely predicted around 50,000 more. The four-week average also dipped to 224,250. Layoff rates are low historically, but any number above 225,000 could signal weakness in the labor market—this scenario often triggers a Bitcoin rebound as hopes for easing increase.

Employment statistics are a key focus for the Federal Reserve, with Chairman Jerome Powell emphasizing the need to sustain labor market health while the Fed manages inflation.

The timing of these reports is also crucial. Markets will be closed on Thursday for Thanksgiving and will have reduced hours on Friday. This shorter trading window could amplify market volatility if Wednesday's data yields unexpected results. Since Bitcoin is traded 24/7, the cryptocurrency market could experience significant movements even when traditional markets are closed.

Other indicators also influence this outlook. The US Empire State Manufacturing Survey increased to 18.7 this month, the highest level in a year and significantly above the forecast of 6.0. This may suggest resilience in the economy, complicating the narrative around potential rate cuts.

Increases in manufacturing suggest potential challenges for rate cut expectations.

The convergence of these various data points makes this week crucial for crypto markets. Bitcoin's connection to Federal Reserve policy expectations has tightened recently, meaning that any significant economic report could spark price volatility. As the market digests the previously delayed September data alongside new figures from November, we can expect a dynamic shift in crypto price trends as the year draws to a close.