These Events Will Be Key For Bitcoin And Crypto This Week

This week could prove to be a very important one for the cryptocurrency and Bitcoin markets. Markets are currently overwhelmed by news regarding the fight between Binance CEO Changpeng Zhao and Bitcoin. (“CZ”) Sam Bankman-Fried, CEO of FTX (“SBF”)The market could benefit from two important events: the US’s midterm elections and CPI data release.

As Bitcoinist reports, CZ had announced on Sunday that Binance will sell all of its FTT tokens after a report surfaced that FTX’s books are in trouble. FTX has denied the rumors and Alameda deny them, but FTT is experiencing a lot more selling pressure.

According to some analysts, this “FUD” could have a significant impact on the markets. At press time, Bitcoin prices had fallen below $21,000. This mark was broken last Friday, and it has now been reached for the first time in mid-September.

BTC USD Bitcoin
Chart of Bitcoin drops below $21,000 in 4 hours Source: TradingView

Bitcoin ahead of the Midterm Elections

Tomorrow’s midterm elections, which will decide how Congress is composed, will take places in the U.S. According to Bloomberg, there are huge stakes for Bitcoin and the crypto community.

While the crypto sector waited to see clear regulations in 2022. Several bills were introduced that would have allowed the industry to move forward. But, due to political differences between lobbyists and lawmakers, along with time pressure, passage was not possible.

Experts predict that the discussion will drag on into 2023 unless there is a crypto bill attached to any government funding package, or other bill that must be passed. “That makes the midterm elections more important than ever,” Bloomberg reports.

According to current predictions, Republicans may win both the Senate and the House of Representatives. This could be a boon for the crypto industry. In Cynthia Lummis and Tom Emmer, Republicans provide two of the crypto industry’s biggest supporters. Bloomberg estimates the following:

A Republican-controlled Congress would also likely put pressure on agencies, like the SEC — which the industry has charged with regulating through enforcement — to ease their aggressive posture against crypto firms.

Wednesday, April 25th: CPI Data

It is not clear if there will be any positive effect on the market for the near term, although it seems unlikely. All eyes will be focused on Thursday, October 10.

The new Consumer Price Index (CPI), will be published on this date. Jerome Powell, the U.S. central banking president, stressed that data should be received in order for the U.S. to decide the next steps of its interest rate policy. Thursday may be an important day for the financial markets in this regard.

Markets could respond to higher inflation than expected by selling off. In contrast, an unexpectedly large drop in inflation could trigger a recovery rally in anticipation of slower rate increases by the FED.

CPI is not the only important indicator. The core CPI measures change in goods and services prices, but excludes the energy and food sectors. This could signal a strong bullish sign for markets if the core CPI drops for the first-time in three months after an increase of producer prices (PPI).

In previous crises, such as in the 1970s and 1980s and also in 2008, the PPI was always a leading indicator of flattening inflation, which ultimately led to the FED’s pivot on interest rates. The beginning of a close shift could occur for Bitcoin and cryptocurrency markets if the core CPI falls and CPI drops.

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