After a relatively quiet weekend, the attention of cryptocurrency traders this week is directed towards several U.S. economic data points that may outline market movements, especially for Bitcoin BTC and Ethereum ETH.
1. Consumer confidence and sentiment
Investors are awaiting consumer confidence and sentiment data on Monday and Friday.
Consumer confidence is expected to decline in August to 96.5 compared to 97.2 in July.
Conversely, consumer sentiment is expected to remain steady at 58.6, which is considered one of the lowest levels in this century.
Weak consumer confidence and sentiment may indicate a decline in spending, which pressures high-risk assets like digital currencies. However, if the numbers come in better than expected, it may increase risk appetite and support stocks at the expense of the crypto market.
2. Initial unemployment claims
Labor market data remains a focal point for investors, especially with unemployment claims numbers being released on Thursday.
Last week, the number of applicants reached 235,000, while forecasts indicate a decrease to 230,000.
The decline in claims reflects the resilience of the labor market, which may ease the chances of interest rate cuts and put pressure on Bitcoin.
Conversely, the continued rise in ongoing claims may signal difficulty in employment, which could heighten market concerns and support caution in crypto.
3. Personal Consumption Expenditures (PCE) data
One of the key data points expected on Friday is the Personal Consumption Expenditures (PCE) index, which is the Federal Reserve's preferred measure for monitoring inflation.
Expectations suggest a rise in core PCE to 2.9% year-on-year compared to 2.8% in July.
Ongoing inflation at high levels may reduce the chances of interest rate cuts, putting short-term pressure on Bitcoin.
But in the long term, this may enhance the role of digital currencies as a hedge against the erosion of purchasing power.
Current market situation
As of the time of writing, Bitcoin BTC is trading at around $112,579, down more than 2% over the past 24 hours, while Ethereum ETH is moving near $4,711 after strong tests of new levels over the weekend.
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