This week, the crypto market’s attention is focused on US macroeconomics. Three key indicators—consumer confidence, jobless claims, and PCE inflation—could significantly impact the prices of Bitcoin and Ether.
After Jerome Powell’s speech in Jackson Hole last week, the crypto market showed how sensitive it is to Fed statements. Bitcoin spiked briefly but soon corrected, while Ethereum, on the contrary, showed resilience. Now, market participants are waiting for new signals—these may determine the near-term dynamics of cryptocurrencies.
Consumer Confidence and Household Sentiment
The Consumer Confidence Index is one of the first indicators of the state of the US economy. Forecasts suggest the August value will drop from 97.2 to 96.5 points, while the Consumer Sentiment Index, published on Friday, will remain around 58.6. This is one of the weakest levels in recent decades.
Such data indicate a decline in purchasing power and caution among Americans in their spending. Since consumer activity is the main driver of the US economy, weak figures may trigger expectations of monetary policy easing by the Fed.
This, in turn, could support risk assets, including cryptocurrencies.
If the data turns out better than expected, some liquidity may flow into stocks, temporarily reducing interest in crypto assets.
Initial Jobless Claims
The labor market is the main benchmark for the Fed. The week ending August 16 showed 235,000 new jobless claims. The forecast for the next week is about 230,000.
If the number of claims continues to decline, this will confirm the labor market’s resilience and may reduce the likelihood of an imminent rate cut. However, another detail is important—the number of continuing claims. Their growth indicates that the unemployed cannot find new jobs, which signals hidden problems in the economy.
For the crypto market, this is a double-edged factor. On one hand, a strong labor market strengthens the dollar and reduces demand for Bitcoin. On the other, signs of cooling may revive expectations of policy easing, which usually leads to crypto asset growth.
PCE Inflation Index—A Key Indicator for the Fed
PCE (Personal Consumption Expenditures) is the Fed’s favorite indicator. The August value is forecast at 2.6% year-over-year. Core PCE (excluding food and energy) is expected at 2.9% versus 2.8% in July.
If core inflation is higher than expected, the Fed is unlikely to move quickly toward policy easing. But for the crypto market, another point is important: in the long term, high inflation strengthens Bitcoin’s role as a hedge, especially amid a growing US budget deficit and weakening trust in the dollar.
Current Dynamics of Bitcoin and Ether
After Powell’s speech, Bitcoin weakened. It is now trading around $111,300, down more than 2% in a day—$10,000 below recent highs. Ethereum is holding up better: around $4,600, with a moderate decline.
ETF flows confirm the divergence: Bitcoin funds saw over $1.1 billion in outflows over the week, while Ethereum’s outflow was limited to $241 million.
The market is divided. Some analysts expect a Bitcoin rebound to $180,000 by year-end, while others are betting on Ethereum, which could outpace Bitcoin in growth due to more stable inflows into spot ETFs.
What This Means for Traders
The week promises to be eventful. Weak consumer and labor market data could strengthen expectations of a rate cut, which would be a bullish signal for crypto assets. But if the figures exceed forecasts, the Fed may take a more cautious stance and the dollar could strengthen.
In this case, the crypto market may continue to consolidate before gaining momentum again closer to the Fed’s September meeting.
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