Three factors that could drive crypto markets this week: Know them

This week, with economic and geopolitical uncertainty remaining high, financial markets will turn their attention to personal consumption expenditures (PCE) inflation data and the Federal Reserve meeting minutes, signaling greater volatility in stock markets and digital currencies.

After the January CPI data was released, it was lower than expected, with the annual inflation rate of 2.38% and the core inflation rate of 2.5% (the lowest level since the beginning of 2021). Although the market saw a temporary recovery on Friday, the impact quickly faded over the weekend, especially in the cryptocurrency market.

“Kobesi Letter” commented that geopolitical tensions and economic uncertainty still exist, warning that new turmoil will usher in this week.

In terms of economic data, U.S. markets were closed on Monday for Presidents’ Day.

The ADP employment report will be released on Tuesday, followed by the January retail sales report.

Durable goods orders data for December will be released on Wednesday, along with the minutes of the Federal Reserve meeting and speeches by many central bank officials. These data may indicate the direction of future monetary policy.

On Thursday, investors can get a first look at the economy’s growth with a fourth-quarter GDP report.

The most important event remains the PCE inflation report, with Goldman Sachs raising its January core inflation forecast to 0.40% monthly due to rising electronics and information technology prices and the impact of a global shortage of memory and storage chips due to increased demand for artificial intelligence data centers.

Market estimates indicate that this data is still not enough to prompt the Federal Reserve to cut interest rates at the March meeting, and the probability of keeping interest rates unchanged is 90% (according to CME FedWatch).

As for the digital currency market, recent gains have evaporated, with the total market value falling by about 2.5% to $2.41 trillion in 24 hours.

Bitcoin price has also failed to stabilize above $70,000, falling to $68,900 in Asian trading, and the currency has been in a consolidation range for about ten days.

Ethereum price, on the other hand, came under more pressure, falling around 5% to around $1,950, while other currencies continued to underperform.

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