Why this week is volatile for crypto 🙄
Macroeconomic Events and Federal Reserve Policy:
The crypto market is highly sensitive to U.S. economic indicators and Federal Reserve actions. This week, significant events include the release of the Federal Open Market Committee (FOMC) Minutes on August 20, U.S. Initial Jobless Claims on August 21, and a speech by Fed Chair Jerome Powell on August 22. These events could influence expectations for interest rate policies, particularly after recent data showed U.S. inflation rising 0.5% in July (higher than the expected 0.3%) and strong retail sales growth of 1.2%. As a result, market confidence in a September rate cut dropped from 98% to 84%, reducing appetite for riskier assets like cryptocurrencies. Higher interest rates or persistent inflation make non-yielding assets like Bitcoin and Ethereum less attractive, contributing to price declines.
