This will be important for Bitcoin and crypto this week

An eventful trading week for the crypto market

The crypto market has had a turbulent trading week. Bitcoin (BTC) dropped mid-week to a multi-month low of $78,167, but on Sunday came positive news from the U.S. that boosted the entire crypto market. Donald Trump announced that he wants to build an expanded crypto reserve for the US. This caused the prices of Bitcoin, Ethereum (ETH) and other altcoins such as Solana (SOL), Ripple (XRP) and Cardano (ADA) to rise significantly. This allowed the sharp price losses of the previous days to be partially recovered.

Bitcoin closed the week at $94,265, down only 2%, while Ripple posted an increase of about 8% and Cardano rose even 35% in value. In the coming trading week, investors are focusing their attention on the European Central Bank's (ECB) interest rate decision. In addition, there are some important economic figures on the agenda that may affect financial markets.

Key economic figures this week

The first trading week of March kicks off with the release of U.S. manufacturing purchasing managers' indices on Monday. Final figures from the February ISM service sector purchasing managers index will follow on Wednesday. Later in the week, the focus shifts to Europe, where the ECB announces its second interest rate decision of the year on Thursday. On Friday, key U.S. labor market data will be released, including the NFP jobs report and unemployment figures. Investors will additionally pay attention to Fed Chairman Jerome Powell's speech on Friday evening at 18:00 (CET), in which he will comment on the US central bank's monetary policy.

Monday: U.S. manufacturing purchasing managers' index

Monday, March 3, 2025: At 16:00 (CET), the ISM Purchasing Managers' Index (PMI) for the US manufacturing sector will be released. Analysts expect a slight decline from 50.9 in January to 50.6 in February. An index above 50 indicates growth, which would be favorable for the US stock market. Previous recoveries from this threshold caused share price gains in the S&P500 and Nasdaq100. However, should the index fall below 50, it would indicate a weakening economy and could have negative implications for both the stock and crypto markets.

Wednesday: ISM service sector purchasing managers' index

Wednesday, March 5, 2025: At 16:00 (CET), the final ISM Purchasing Managers' Index (PMI) figures for the US service sector will be released. Last month, the index came in lower than expected, at 52.8. For February, analysts are counting on a slight improvement to 53.0. If the actual figures are below prediction, this could lead to selling pressure in the stock market. Strong deviations from forecasts could also lead to increased volatility. If the positive trend visible since the fall of 2024 continues and the index comes in higher than expected, it would indicate a stronger service sector. This could encourage investors to invest more in risky assets, including crypto.

Thursday: ECB interest rate decision

Thursday, March 6, 2025: At 14:15 (CET), the European Central Bank will announce its second interest rate decision of the year. After a 0.25 percentage point rate cut in January to 2.90%, another 25 basis point cut is expected, to 2.65%. Although inflation in Europe has rebounded slightly recently, analysts expect the ECB to cut interest rates because of the weak economic outlook, particularly in Germany, which remains in recession and is forecast to post only meager growth of 0.1% by 2025.

Investors will pay particular attention to ECB President Christine Lagarde's press conference at 2:45 p.m. (CET). Her explanation of the interest rate decision and her outlook on the economic situation in Europe could have a major impact on the euro exchange rate and indirectly on financial markets. Should the ECB surprisingly decide to leave interest rates unchanged at 2.90%, this could weaken the euro and put pressure on risky assets such as Bitcoin.

Friday: U.S. labor market data and unemployment rate

Friday, March 7, 2025: On the last trading day of the week, the Bureau of Labor Statistics releases the latest figures on the US labor market at 2:30 p.m. (CET), including the number of non-farm jobs (NFP) created. Only 143,000 new jobs were created in January, significantly less than the expected 169,000. In December, the number was 307,000, the highest level since March 2024.

Analysts expect 156,000 new jobs were added in February. If this number is lower than expected, it could prompt the U.S. central bank (Fed) to further ease its monetary policy. In the second half of 2024, weak NFP reports led to selling pressure on risky assets, including crypto. However, should actual growth exceed expectations, this would give the Fed more room to keep policy tighter. A strong labor market could be positive for stock prices and indirectly for Bitcoin.

At the same time, the February U.S. unemployment rate is released. In January, the unemployment rate was 4.0%, slightly lower than the expected 4.1%. Another rate of 4.0% is expected for February. If the unemployment rate is higher than forecast, the Fed may factor this into future policy decisions. A deteriorating labor market could deter investors from investing in risky assets. In contrast, a drop in the unemployment rate could signal further recovery in the U.S. labor market, which could increase investors' appetite for risk.

Conclusion
This week is dominated by important economic figures and policy decisions that may affect financial markets. In particular, the crypto market will react to macroeconomic developments and statements by policymakers. Investors would do well to keep a close eye on these developments, as unexpected outcomes can cause volatility in both the stock and crypto markets.