- This week sees the release of the ISM manufacturing index, which is seen as the key indicator of the state of the US economy, which could massively impact crypto.
- The week will also see the release of crucial data on the employment level in the US, with a weak report likely to lead capital into risk-on assets like crypto.
It’s the first week of October, and a lot is on the line, not just for crypto but for the entire capital market in the US and beyond. This is the last month before the US polls, and it’s expected to be abuzz with activity, both on and off the trading floors. For crypto, some key macroeconomic reports to be released this week could have a big impact on the direction of the prices.
The crypto market has been on a downturn for the past day, with the overall market cap dipping 3.3% to settle at $2.24 trillion. This followed a bullish week that pushed the figure to $2.335 trillion, the highest in two months, as Bitcoin topped $66,000 and other cryptos followed suit.
Bitcoin currently trades just above $64,000, dipping marginally over the past day for a $1.265 trillion market cap. Most major coins are trading sideways, with XRP and Dogecoin the biggest losers in the top ten at over 3%. Uniswap and SUI have defied the market by gaining over 4%.
A Big Week for Crypto
This week sees the release of two key US economy performance indicators by the Institute for Supply Management—the manufacturing purchasing manager’s index (PMI) and the services PMI—set to be published today.
These PMIs, and especially the manufacturing PMI, are considered some of the most accurate gauges of the state of the US economy. In the past 22 months, the PMI has been below 50 (out of a possible 100), indicating a contracting economy. In August, the index was at 47.2, and analysts expect it to rise marginally to 47.3, and while this is an improvement, it’s still far below the expected performance.
These indices have had an outsized impact on the price of Bitcoin over the past few months, as noted by digital asset research firm 10X Research.
Have You Seen This? The Most Crucial #Bitcoin Development of the Year
1-14) While most attention has been on U.S. employment data, the ISM Manufacturing Index triggered a 10% market correction during the first week of each of the last three months. #Employment data played a… pic.twitter.com/lBotX0JMFx
— 10x Research (@10x_Research) September 30, 2024
The company notes that over the past three months, weak PMI figures have wreaked havoc on crypto, leading to a 10% crash in the first few days of each month.
10X states:
Weak employment figures fueled recession fears, increasing expectations for Fed rate cuts, while more robust employment data reassured investors that the economy was more resilient than the ISM Manufacturing Index suggested.
China has already posted its PMI, which shows that its manufacturing sector increased from 49.1 in August to 49.8 in September, aided by the government’s initiatives to boost demand. However, its services PMI contracted at the fastest rate in 14 months as the labour market weakened.
