3 Things That Could Impact Crypto Markets in Week Ahead

Crypto markets were boosted late last week after Fed chair Jerome Powell signaled a potential change in monetary policy; however, some of that momentum has waned on Monday morning.

While Powell didn’t commit to rate cuts outright, he acknowledged that the balance of risks was shifting in a way that “may warrant” less restrictive monetary policy and rate cuts next month.

US PCE inflation data will be the key economic indicator in the coming week as investors anticipate interest rates coming down slightly in September.

Economic Events August 25 to 29

Tuesday will see the release of consumer confidence data, which reflects the sentiment of consumers regarding inflationary pressures.

Thursday is a big data day, as the second-quarter GDP growth annualized report is published, providing more insight into the economy’s growth and incorporating additional data that was not included in the advance estimate. HSBC economists forecast that Q2 GDP growth will be revised up to 3.2% from the initial estimate of 3.0%.

July’s Core Personal Consumption Expenditures (PCE) is due on Friday, tracking changes in inflation based on consumer spending. This is one of the Federal Reserve’s preferred inflation gauges, along with CPI. The PCE report will be the next key item of data ahead of the central bank’s September policy meeting.

Friday will also include consumer sentiment reports and inflation expectations, which summarize consumer confidence and long-term expectations.

The big earnings report due this week is from semiconductor giant Nvidia, which is a bellwether for the entire AI industry. Nvidia is expected to post a 48% rise in earnings per share on revenue of $46 billion for its second quarter, according to Reuters.

Crypto Market Outlook

Digital asset markets are retreating this Monday morning in Asia, with total capitalization dipping 1% to $4.04 trillion.

Bitcoin has wiped out weekend gains and has returned to last week’s levels of around $113,000 as it returns to support levels. BTC hit $117,000 shortly after the Fed speech, but was rejected sharply from that level.

Ethereum hit an all-time high, finally breaking its 2021 peak, in late trading on Sunday when it spiked to $4,950; however, it has fallen back to the $4,700 level at the time of writing.

The alcoins were a mixed bunch with losses for Tron, Bitcoin Cash, and Litecoin, but gains for Chainlink and Hyperliquid.

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