This week, there are several U.S. economic data points worth looking forward to in the cryptocurrency market. These events may influence traders' and investors' sentiment, thereby affecting trading strategies and potentially leading to volatility.
As traders prepare for potential volatility, Bitcoin (BTC) remains above the psychological level of $90,000 as of this writing.
Initial claims for unemployment benefits
The U.S. Department of Labor releases weekly unemployment benefit application data, tracking the number of individuals applying for unemployment benefits. This week's report is scheduled for release on Thursday, November 21, following 217,000 initial unemployment claims for the week ending November 16. This figure is lower than the expected 223,000 and also lower than the previous week's unadjusted 221,000.
Richard Bernstein Advisors, with assets under management of $15.6 billion, states: "The number of unemployment benefit applications (leading indicator) continues to indicate that the labor market is very healthy."
The latest unemployment benefit application data shows that despite recent storms and strikes causing disruptions, demand for workers remains stable. If this downward trend continues, it could indicate easing economic challenges and a strengthening labor market. This may stimulate consumer spending and confidence, potentially benefiting financial markets.
When the number of unemployment benefit applications decreases, it indicates that more people are employed or able to find work. The result is an increase in disposable income and a rise in investments in assets like Bitcoin.
S&P Global U.S. Manufacturing Purchasing Managers' Index
The S&P Global U.S. Manufacturing Purchasing Managers' Index (PMI) for November will be announced on Friday. This index is a key economic indicator measuring the performance and health of U.S. manufacturing. The previous value was 48.5, with the market generally expecting 48.8, making it one of the key macroeconomic indicators to watch this week.
A higher PMI index typically indicates expansion in the manufacturing sector, thus strong economic growth and increased manufacturing activity. This may bolster investor confidence in the overall economy. As investors seek high-yield investment opportunities like Bitcoin, this positive sentiment may spill over into the cryptocurrency market.
Similarly, PMI data will also influence investors' market sentiment and risk appetite. Positive PMI data could create a more optimistic investment environment, potentially benefiting risk assets like cryptocurrencies.
S&P Global Services PMI
Another U.S. economic data point is the S&P Global Services Purchasing Managers' Index (PMI), which will be announced on Friday. This index measures the performance of the U.S. services sector and provides valuable insights into economic activity and business confidence in industries such as hospitality, finance, healthcare, and technology.
The previous Services PMI index was 54.1, and its changes may also impact Bitcoin and the broader cryptocurrency market. An increase in the Services PMI index typically signals growth in the services sector, which is a significant driver of economic activity. This may translate into positive sentiment in the financial markets, as investors seek alternative assets with growth potential, potentially benefiting cryptocurrencies like Bitcoin.
A strong Services Purchasing Managers' Index may also enhance optimism about the business environment, prompting investors to take on more risk, including investments in cryptocurrencies.
The PMI Insight account notes: "Following the U.S. presidential election, people will eagerly anticipate the preliminary PMI survey results in November to reveal economic trends in major world economies, while U.S. consumer confidence will also be announced."
Nvidia earnings
GPU leader Nvidia (NVDA) will announce its third-quarter earnings on Wednesday, November 20. The report often emphasizes the demand for GPUs driven by gaming, artificial intelligence, and cryptocurrency mining. Analysts expect revenue to surge by 84%, reaching $33.28 billion, primarily due to demand for AI infrastructure. Earnings per share are projected to rise from $0.37 to $0.70.
Strong sales of AI GPUs may boost investor confidence in AI-driven industries, including AI-focused cryptocurrencies. Historically, Nvidia's performance has impacted the prices of AI-related tokens, and if this week's earnings indicate continued growth in AI and crypto applications, bullish momentum may emerge.
Ahead of Nvidia's third-quarter earnings report, sentiment around AI stocks may impact AI-focused cryptocurrencies like Render (RENDER), Worldcoin (WLD), Near Protocol (NEAR), and Bittensor (TAO). Additionally, the DePin project Aethir (ATH), known for its GPU rendering capabilities and often referred to as 'the Nvidia of the cryptocurrency world,' may also be affected by the earnings report.
Notably, Nvidia's performance will be announced shortly after the U.S. Supreme Court hinted at a narrow ruling regarding the lawsuit against the company by shareholders. As previously reported by BeInCrypto, the lawsuit accuses Nvidia of misleading investors about its reliance on cryptocurrency mining revenue, which may further exacerbate volatility in Nvidia's stock and the related cryptocurrency sector.
