Despite growing concerns about a potential US recession, the crypto market seems to be bracing for a new bull run.
With Bitcoin (BTC) breaking $30k and Ethereum (ETH) gearing up for the highly anticipated Shapella Upgrade on April 12, there’s a lot happening in the cryptocurrency world.
This week, the US Consumer Price Index (CPI) figures will be released, along with the Bank of Canada Meeting and the US Fed Minutes. These events might have a significant impact on the global economy, but the crypto market seems to be buzzing with excitement – with Bitcoin poised to act as a safe haven asset in face of economic turbulence.
Ethereum Markets Brace for $33bn Unlock Tomorrow
The Ethereum Shapella Upgrade has everyone talking. This upgrade will allow validators to withdraw their staked ether for the first time (with $33bn in ETH currently locked up). Some analysts have raised concerns about a possible negative impact on ETH’s price.
However, data analysis firm CryptoQuant suggests that selling pressure might not be significant, as most staked ETH is currently at a loss. With up to 30% yield on staked ETH, selling pressure from extreme profits seems unlikely.
Meanwhile, Ethereum’s price crossed $1,900 on April 5, its highest in eight months, likely driven by crypto market anticipation of the Shapella Upgrade rather than Bitcoin’s movements.
GM, big week ahead! Was planning to write thread on Shapella, but decided a picture sums it up better. Don't midcurve this folks.
Here's my rough plan for this week, and what I'm looking out for. pic.twitter.com/sHnrcDH2YL
— Flip Research (@Flip_Research) April 10, 2023
Recession Fears Put US Economic Data in Spotlight
US economic data is in the spotlight this week. March CPI data, retail and food services sales, and the minutes from the March 21-22 FOMC meeting are all on the agenda.
Policymakers will be scrutinizing the CPI data to assess inflation, while the employment report may give the FOMC some room for another rate hike at the May 2-3 meeting.
However, investment bank MPS Capital Services has warned that the US economy could be in a recession by year-end – driving crypto such as Bitcoin to new rallying heights.
The bank’s strategist, Luca Mannucci, predicts that the Federal Reserve will raise interest rates by an additional 25 basis points, which could drag the economy down.
Uh-oh. Layoffs are starting to show up in the jobs data.
Specifically in the South.
New payroll data from ADP shows states across the South (TX, FL, TN) have LOST JOBS to start 2023.
Meanwhile coasts are still adding jobs.
Just a blip? or start of a trend? #recession pic.twitter.com/y6oLZzDEIw
— Nick Gerli (@nickgerli1) April 6, 2023
Read More: Tech Layoff Stats 2023 – Where the Jobs Cutback Axe is Falling
Despite these concerns, Bitcoin’s dominance rate has risen to its highest level in nearly two years, while Ethereum’s remains stagnant.
This could be attributed to investor caution ahead of the Shanghai-Capella hard fork, which will unlock over 18 million ETH staked since late 2020.
Some fear that this unlocking may cause a sell-off, leading to market uncertainty.
However, analysts believe that the selling pressure resulting from the Shapella Upgrade is unlikely to be significant, as it would take approximately 100 days for one-third of validators to exit if they all attempt to exit simultaneously.
While ostensibly we’re in risky territory for crypto assets, despite looming US recession fears and the potential impact of the Shapella Upgrade, the crypto market seems to be preparing for a bull run.
The resilience of crypto like Bitcoin and Ethereum in the face of economic uncertainty is a testament to their growing influence and importance in the global financial landscape. So, buckle up, because the crypto rollercoaster is about to take off once again!
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