As we navigate the third week of June, the cryptocurrency market anticipates a series of potentially game-changing events.
Following a week marked by a significant sell-off of altcoins and a moderate dip in Bitcoin price, traders are bracing for an upswing in volatility.
The U.S. Consumer Price Index (CPI) and Producer Price Index (PPI), the U.S. Federal Reserve Bank interest rate decision, and a flurry of developments in the legal sphere are among the headline events.
SEC rulings on crypto exchanges
A collection of pivotal crypto-related events will also unfold on Tuesday.
The U.S. Securities and Exchange Commission (SEC) is expected to respond to Coinbase’s rulemaking request, and the hearing on the SEC’s temporary restraining order (TRO) against Binance US are also expected to create significant ripples in the crypto space.
Also anticipated is the release of internal SEC Hinman documents in the Ripple case, which could provide insights into Ethereum’s previous classification as a non-security, a status now under scrutiny by SEC Chairman Gary Gensler.
The public comment period for the SEC’s proposed expanded definition of an exchange, which might necessitate DEXs to register as securities exchanges, concludes on the same day.
The crypto market has been under intense scrutiny from global regulators. Jonathan Shiery, a partner at Guidehouse Financial Services, underlined the importance of these regulatory developments.
“These regulatory entanglements should continue to be the front and center of the cryptocurrency industry’s attention due to [their] ramifications on exchanges, the U.S. cryptocurrency market, innovation, the banking industry’s appetite to bank crypto companies and the user’s ability to access digital assets,” Shiery said.
Impact of inflation on crypto prices
On Tuesday, focus will be on the U.S. Bureau of Labor Statistics releasing U.S. inflation data for May. Following a trend of decreasing annualized CPI (YoY), experts predict a further decline to 4.1%. Any better-than-expected figures could positively impact financial markets and by extension, Bitcoin and other cryptocurrencies.
Wednesday brings the Federal Reserve’s interest rate decision. The most recent increment by 25 basis points raised the key interest rate to 5.25%, a move indicative of the Fed’s hawkish stance.
Disinflation indicators and market sentiment
Also on Wednesday, the PPI will be released. The PPI data could provide another leading indicator of rapid disinflation.
In April, the year-over-year PPI increase was 2.3%, which was less than the expected increase of 2.5%. This indicates that producer prices were rising, but at a slower pace than anticipated.
Looking forward to May, the expectation is for an even slower rate of increase at 1.5%. Core PPI, refers to the PPI excluding volatile items like food and energy, came in at 3.2%, below expectations of 3.3% in April, and is expected to be only 2.9% in May.
Again, this suggests a deceleration in the rate of price increases, which is indicative of disinflation.
Thursday will see the release of jobless claims data, which could provide further insight into the economic recovery and have an impact on market sentiments. This, along with customer sentiment data due on Friday, could add to the week’s volatility.