Crypto Market Volatility Ahead: Key Economic Events to Watch

With a number of important economic events set to influence crypto market sentiment and cause considerable volatility, the community is preparing for a crucial week. Investors will be closely monitoring key economic data releases and Federal Reserve Chair Jerome Powell's testimony for information that could affect the trajectory of the price of Bitcoin and other digital assets.

Key Economic Events This Week

In a recent X post , The Kobeissi Letter drew the crypto community’s attention to the major US economic developments this week. The post read, “The markets are looking ahead to the October and December Fed meetings as more data comes in.”

One of the key events this week is the Fed Chair Jerome Powell’s speech on Tuesday. Investors are eagerly awaiting insight into the central bank's future policy moves after last week's rate cut, with Powell's upcoming testimony set to provide crucial clarity. The crypto sector, being particularly sensitive to interest rate shifts, will be closely watching his tone and language. In addition, the Trump-appointed Governor, Stephen Miran, will also face the crowd on Monday.

Important housing industry data will also be released during the week, offering important new information about the US housing space. While Thursday's existing home sales data will provide insight into the performance of the secondary market, Wednesday's new home sales figures are expected to show the current demand for new housing. As per economists' prediction, the new home sales data is expected to dip to 650,000 from 652,000; the existing home sales may decline from 4.01 million to 3.95 million.

An updated view of the US economy will be given by Thursday's Q2 GDP revision, which will highlight important factors like consumer spending and business investment that might have affected the Fed's decision-making. It is predicted to stay steady at 3.3%.

Friday's Core PCE reading, the Fed's preferred inflation gauge, will offer crucial insights into inflation trends. Additionally, the Michigan Consumer Sentiment Index and Consumer Inflation Expectations will offer a snapshot of consumer confidence and long-term inflation expectations. While the PCE index is predicted to soar from 0.2% to 0.3%, the year-over-year data may surge from 2.6% to 2.7%.

How Will the Crypto Market React?

The $3.9 trillion crypto market is currently experiencing a downtrend, with the total market capitalization down by 3.77%. Leading players like Bitcoin, Ethereum, XRP, BNB, and Solana have experienced notable dips of 2.38%, 6.22%, 6.48%, 4.86%, and 7.33%, respectively.

If Powell hints at the Fed’s potential dovish stance, the crypto market is slated to make a rebound and vice versa. A dip in home sales reports could have a positive effect on the cryptocurrency industry. Historically, a weakening housing space has signaled broader economic concerns, prompting investors to seek alternative assets like cryptocurrencies.