As we enter a week where fluctuations become evident in global markets, cryptocurrencies are also looking for direction in an environment of intense uncertainty. US President Donald Trump’s harsh statements regarding trade policies, a possible government shutdown in Washington and the US Federal Reserve’s (Fed) interest rate decision are simultaneously testing investors’ risk appetite. Macroeconomic data and balance sheets of major technology companies to be announced later in the week will be decisive on pricing. Analysts emphasize that high volatility is inevitable for financial markets in the last week of January.
Global Agenda and Macroeconomic Risks
Developments originating from the USA are at the center of the week’s prominent headlines. President Trump’s threat of up to 100 percent tariffs on Canada has brought concerns about global trade balances back to the agenda. Although Canadian Prime Minister Mark Carney’s announcement that no free trade agreement is planned with China has partially reduced the tension, the cautious atmosphere in the markets remains. At the same time, the failure to reach a consensus on the budget in the US Congress strengthens the possibility of a partial government shutdown.
The macro data calendar also means a busy week for investors. Consumer Confidence data to be announced on Tuesday will provide important clues about the economic expectations of households. The Fed’s interest rate decision will be followed on Wednesday; Market expectations are that there will be no change in the policy rate. The Producer Price Index, which will be published on Friday, will give new signals about the course of inflationary pressures.
In addition, balance sheet disclosures of companies with a high weight in technology stocks also affect risk perception. Microsoft, Meta and Tesla are expected to share their results on Wednesday, and Apple on Thursday. Futures indices, which started the week with a decline, show that investors are taking cautious positions.
Pressure on the Cryptocurrency Market
Global uncertainty brought about harsh sales on the crypto currencies front. In the Asian session, the total market value decreased by 1.8 percent to 3 trillion dollars. Leading cryptocurrency Bitcoin tested around $86,000, approaching its lowest level in five weeks, and returned to the $87,000 band with a limited recovery. Technical analysis points to the risk of a deeper decline if critical supports are broken.
Weakness is more evident on the Ethereum front. The price’s brief test below $2,800 showed that buyers were not strong enough. In the altcoin market, it seems that the sales are widespread and the tendency to avoid risk prevails.
According to experts, short-term direction predictions in crypto markets have become difficult due to the intensity of macroeconomic headlines. Interest policy, inflation data and geopolitical developments stand out as the main factors that will determine the course of cryptocurrencies.
