Macroeconomic data to test Bitcoin’s $100,000 level this week

Traders and investors brace for a wild week in crypto starting Monday, with several key macroeconomic data in the pipeline that could impact their portfolios.

Meanwhile, Bitcoin (BTC) remains above the $100,000 mark. Whether this key level holds as support will depend on how traders navigate this week's economic data release.

Donald Trump's inauguration

Monday, January 20, marks the Martin Luther King Jr. Day in America. However, because it represents an important day for crypto market participants in the country Donald Trump's Inauguration. On his first day, Trump promised to sign more industry-friendly executive orders..

Before the election, Trump promised a cornerstone of the bid would be a crackdown on regulators, particularly around cryptocurrencies. So the return of a pro-Crito candidate to the White House fueled speculation about positive regulatory shifts. Against this backdrop, there is strong interest in Bitcoin among US investors.

Considering that the markets are closed for holidays on Monday, the impact of this key development will only bring the markets the next day. Nevertheless, some investors remain cautious, favoring leverage in both directions.

“This Trump inauguration is either big sell-side news or that's a total middle-of-the-road curve and we're really going to raise it,” one user said.

Initial unemployment claims

Initial jobless claims on Thursday showed how many US residents applied for jobless benefits last week, providing new insight into the health of the labor market.

In the previous report, initial jobless claims topped the consensus and rose to 217,000 in the week to January 10.

If unemployment continues to rise, it will prolong the economic crisis and weaken the labor market. This could lead to lower consumer spending and lower consumer confidence, which could affect various financial markets, including Bitcoin and cryptocurrency.

When unemployment claims rise, it suggests that more people are unemployed or unable to find work. This reduces disposable income and increases investment in assets such as Bitcoin.

BOJ possible rate hike

Another big focus this week is the Bank of Japan's interest rate decision and the January 24 economic outlook report. A price hike could signal a shift in global liquidity, putting pressure on commodity trade.

“If they raise prices (and they may), global markets are going to feel it. Crypto included,” one user shared on X.

A Bloomberg survey of most economists believes Japan will raise interest rates, causing market turmoil. However, this decision hinges on whether there will be market disruption following Trump's inauguration.

Absent that, Japan's central bank may reiterate its commitment to further rate hikes if the economy continues to recover, Reuters reported on Friday, citing sources familiar with the matter.

“Bitcoin could experience a massive 50% drop in 7 days. This fits perfectly with the 1929 flash crash pattern following the BoJ's rate decision on January 24th.” Another user on X said.

Another prominent user and researcher on X, Cyprus Demanincore, shares his opinion, suggesting that a BOJ rate hike may have more impact on Bitcoin's price action than Trump's inauguration.

“Everyone's focus is on Trump's inauguration for the next major market move, and the biggest force likely to be the BOJ's interest rate hike. If they don't, we shouldn't have anything to worry about until March. Still, there is something to consider when managing risk in a portfolio and to prepare mentally, the researcher said.

The general understanding is that the BOJ's decision to raise interest rates could affect global financial strategies, such as the yen's trade. In this strategy, investors borrow yen at low rates to invest in high-yielding assets. This could disrupt financial flows and affect risk assets globally, potentially masking a collective “Trump rally.”

Bitcoin has a reputation for being sensitive to global economic changes. A BoJ rate hike could lead to a sell-off in risk assets, including BTC. This is because investors need to hedge trades in yen, which can cause price volatility in the pioneer crypto.

Consumer sentiment

Additionally, Friday's U.S. Consumer Sentiment report is critical, providing an overall measure of how individuals feel about finances and the economy as a whole. Positive consumer sentiment could boost confidence in the economy and lead to greater investment in assets such as Bitcoin. On the other hand, negative sentiment could cause investors to lose confidence and shift to safer assets, which could affect the price of Bitcoin.

According to data from BeInCrypto, bitcoin was trading at $102,461 as of press time, down 2.15 percent from the open of Monday's session.