Cryptocurrency markets were unsettled at the start of the week as investors braced for a heavy slate of US economic data that could drive sharp price swings.
Bitcoin slipped late Sunday, briefly falling below $88,000, before recovering to around US$89,000 in early Asian trading on Monday. The rebound offered little relief, with the world’s largest cryptocurrency still hovering near its lowest level of the week.
The cautious mood comes as a backlog of US economic indicators is set to be released following weeks of delays linked to a government shutdown, forcing traders to absorb a wide range of data in a short period.
Markets are now focused on a combination of jobs, consumer spending and inflation figures, a convergence analysts say has heightened volatility risks, particularly for speculative assets such as cryptocurrencies.
Attention early in the week will centre on US retail sales and employment data, which are expected to provide fresh insight into consumer demand and labour market strength.
More Read
Strong readings could reinforce the Federal Reserve’s cautious stance on interest rates, while weaker data may revive concerns that the US economy is losing momentum.
Inflation data later in the week is expected to be pivotal, with investors closely watching the Consumer Price Index and the core Personal Consumption Expenditures index for signs that price pressures are easing.
Persistently high inflation could push expectations for interest-rate cuts further into the future, a scenario that typically weighs on risk assets, including cryptocurrencies.
More Read
Beyond the United States, global factors are also adding to uncertainty. Japan’s central bank is widely expected to cut interest rates later this week, a move that could ripple across global markets, though some analysts say it has already been priced in.
There were limited positive signals for the crypto sector, with several major firms recently receiving conditional approval to operate as national trust banks in the United States, a development seen as supportive of broader stablecoin adoption.
Ethereum outperformed much of the broader market, holding above US$3,000, while most alternative cryptocurrencies remained under pressure.
With multiple US data releases and speeches by Federal Reserve officials scheduled in the days ahead, traders are preparing for further volatility as crypto markets react to shifting macroeconomic signals.
Background to Crypto
Cryptocurrencies have increasingly moved in tandem with broader financial markets as institutional participation has grown and sensitivity to interest-rate expectations has increased.
After rallying earlier in the year on optimism over exchange-traded funds and anticipated monetary easing, crypto prices have faced renewed pressure amid stubborn inflation and central bank caution over rate cuts.
Market participants say near-term price movements are likely to remain closely tied to macroeconomic data and central bank messaging, reinforcing volatility across digital asset markets.
