tl;dr
Crypto markets opened the week with a decline, pushing Bitcoin to around $115,000 and Ethereum near $4,300. The market's direction depends on key upcoming US economic events, notably the Federal Open Market Committee (FOMC) minutes release on Wednesday, which may signal future Fed interest rate poli...
Crypto markets started the week with a noticeable dip, pushing Bitcoin (BTC) back down into the $115,000 range and causing Ethereum (ETH) to hover around $4,300. This decline’s duration—whether it signals a short-term shakeout or an extended correction—largely depends on several key US economic events scheduled this week. Bitcoin, in particular, has shown heightened sensitivity to US economic data, making these upcoming releases crucial for its trajectory toward new highs.
The spotlight this week falls on the Federal Open Market Committee (FOMC) minutes from the July meeting, set for release on Wednesday. These minutes could offer critical clues about the Federal Reserve’s (Fed) future monetary policy. Discussions around potential interest rate changes hold significant sway over global financial markets, including cryptocurrencies. Typically, higher interest rates bolster the US dollar and raise borrowing costs, dissuading investors from riskier assets like Bitcoin. On the other hand, signals of lower rates or a dovish stance can ignite crypto rallies as investors chase greater returns in speculative markets.
Currently, the CME FedWatch Tool forecasts an 84.8% chance of the Fed cutting interest rates to between 4.00% and 4.25% in its September 17 meeting, while only a 15.2% chance exists for rates to remain steady between 4.25% and 4.50%. These expectations come amid reports of persistent inflation, which rose at an annual rate of 2.7% in July. The FOMC minutes will also reveal fractures within the committee—post a 9-2 vote to maintain rates—on whether a rate cut is advisable.
Another key US economic indicator with potential crypto impact is the initial jobless claims report, due out this Thursday. This figure reflects the number of Americans filing for unemployment benefits for the first time and has become an increasingly important barometer for Bitcoin. Last week’s claims totaled 224,000, slightly down from the previous week’s 226,000 and below economists’ forecasts of 229,000. Stabilizing or slightly rising jobless claims may signal a cooling labor market, potentially encouraging Fed rate-cut hopes and supporting Bitcoin’s momentum.
The week concludes with the high-profile Jackson Hole Economic Policy Symposium from August 21 to 23, where Fed Chair Jerome Powell will deliver a keynote speech on Friday, August 22 at 10 AM ET. This event gathers central bankers, policymakers, and economists from across the globe and is renowned for generating unexpected market volatility. Powell’s remarks carry particular weight as they often recalibrate market expectations on rates and growth, influencing equities, bonds, and crypto assets alike.