Investments in any type of asset, including the price of Bitcoin, are influenced by a huge multitude of factors, and probably the most important are the macroeconomic indicators, attached to the economic calendar.
Among these indicators we find results as important as GDP growth, the variation in non-farm payrolls, or interest rate decisions
This calendar also includes other important events, mainly geopolitical in nature, such as press conferences offered by rulers, major summits and conferences, elections; as well as the announcement of the different relevant public holidays that usually decrease monetary activity.
Influence of the economic calendar on the markets
It is the currency and derivatives operators that use this calendar the most. This is because the macroeconomic indicators, being a fact that shows the health of a country, directly influences the price of the different fiat currencies.
However, it is not only they who use them; Even other assets such as stocks, bonds, indices, gold, oil, or Bitcoin’s own price, are affected by geopolitical events and macroeconomic data.
In the financial markets everything is connected, and the main vehicle to carry out transactions in them is fiat money.
We generally observe how gold, silver, or oil are sold in dollars; therefore, a strong fluctuation of this currency will affect its position against assets such as those named.
But it’s not just the connection. Commodity prices are affected by indicators such as the unemployment rate, consumption, or interest rates.
The release of new construction permits in the United States can boost the S&P 500 abruptly, as it is an index that follows the growth of that country’s economy. The same would happen with the DAX in Germany, or the NIKKEI 225 in Japan.
When interest rates vary, government bonds are one of the main assets to be affected. If the central bank decides to go up, the prices of the bonds may fall, just the opposite.
How does the economic calendar influence the price of Bitcoin?
Just as share prices are primarily affected by announcements regarding the company’s growth or slowdown, cryptocurrencies in general are largely driven by fairly direct factors, such as code developments and increased adoption.
However, they are not totally unrelated to the other markets. For example, interest rates may currently be a major influence on the price of Bitcoin.
Immediately, a country’s currency is affected when interest rates vary. When a rate is low, the currency of the country where it was adjusted increases its price; and consequently it is stronger against the different assets.
Interest rates are low when you want to encourage consumption, and despite the fact that it is usually a rescue measure, in the long term it generally triggers inflation.
Bitcoin price rising in global stress situation
The current situation is an excellent time to see how this happens. The United States Federal Reserve made several recent rate cuts; And in addition to this, they introduced liquidity to the markets, trying to rescue what was sinking.
In turn, many analysts already predict the high probability of a coming inflation in the US economy, and as a consequence a devaluation of the dollar.
Many assets, mainly those that have already worked throughout history as a refuge, and others that are adding up, attract all that interest of protection, so they tend to increase their price.
In conclusion, right now, even with a cryptocurrency market that is not fully tied to the global economy, the impact of macro data is not too high.
But, as we could see, some publications and events that manage to abruptly move to important currencies such as the dollar and the euro, do tend to impact the price of Bitcoin; but it is mainly caused by the fact that it is these currencies that the asset itself faces.
How to use this tool?
Worldwide, there are many publications of economic data and events, all this is ordered according to their impact, date and time on the economic calendar.
When you select a date, the calendar shows you all the events of that day that affect the economy.
Each of them are classified according to the impact on the markets, generally using colors or three brands.
In the case of the economic calendar offered by XTB, one green mark indicates low impact, two yellow marks indicate medium impact, three red marks indicate high impact.
In addition, you will be able to find relevant information, such as the country or countries that will be affected; the data thrown in case of being an indicator, a forecast, and the previous result.
Will you start taking into account the economic calendar to follow the movements of the price of Bitcoin ?. Let us know your opinion in the comments!