After sealing its best-ever weekly close, Bitcoin (BTC) is poised for another record-breaking week as it inches closer to fresh all-time highs. The cryptocurrency’s price has been on a steady upward trend, and the coming week promises to be just as exciting.
Stagflation Concerns and Fed Policy
The Federal Reserve’s policy decisions will play a crucial role in shaping the cryptocurrency market this week. With inflation accelerating in October, the Fed is faced with a recipe for "stagflation" – rising prices with rising unemployment. This has led to mixed opinions over whether officials will lower interest rates in December.
According to CME Group’s FedWatch Tool, there’s a 35% chance of a pause in rate cuts. The Fed’s top priority has been to avoid a situation with both rising unemployment and rising inflation, as seen in the 1970s. However, with the coming week’s economic data releases, including unemployment figures and consumer sentiment reports, the Fed’s decisions will be closely watched.
Whales Keep Stacking Amid Frustrated ETF Flows
Despite the volatility in spot Bitcoin exchange-traded funds (ETF) flows, whales continue to accumulate more BTC. According to on-chain analytics platform CryptoQuant, both large and small whale entities have been adding to their BTC exposure. This accumulation is a key factor buoying the bull case.
Crypto Social Media Hype: A Caution Flag
Research firm Santiment has analyzed social media volumes for specific terms such as prices, revealing that "hype" around future price hits highs alongside price itself. The Crypto Fear & Greed Index shows levels of ‘extreme greed’ last seen in the run-up to Bitcoin’s old long-term peak in March.
This "FOMO" (fear of missing out) phenomenon is a caution flag, implying that market upside could reverse. As such, investors should exercise caution and conduct their own research before making any investment decisions.
Upcoming Economic Data Releases
The coming week will see several key economic data releases, including:
- Unemployment figures on November 21
- Purchasing Managers Index (PMI) and consumer sentiment reports a day later
These releases will provide valuable insights into the state of the economy and may influence the Fed’s policy decisions.
Investment Advice
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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