Crypto Market in Focus as Powell’s Speech and US Economic Data Take Center Stage This Week

Key Insights:

• With rates expected to stay at 4.25‑4.50%, any hint of earlier cuts could provide a major tailwind for the crypto market.
• The June Core PCE and July jobs report will either reinforce or undermine hopes for a dovish pivot.
• Results from tech heavyweights could affect broader risk appetite, amplifying moves across the digital asset market.

The crypto market is now eagerly waiting for this week’s Federal Reserve meeting and key US economic data, events that could set the tone for digital asset prices.

With Bitcoin (BTC) trading only 3% below its all-time high and Ethereum (ETH) trading near its multi-month highs, their next moves may depend on how this week’s events unfold.

As past data shows the crypto market’s relatively high sensitivity to interest rate expectations and economic signals, traders are on alert for potential volatility in the days ahead.

How Could Powell’s Stance Impact the Crypto Market?

Everyone’s waiting to hear what Fed Chair Jerome Powell says after this week’s policy meeting. Most crypto market observers expect the Fed to leave interest rates unchanged, continuing the pause it initiated in March.

But even a small change in Powell’s tone, especially any hint about when rate cuts might start, could affect Bitcoin and Ethereum right away. Crypto prices have become highly sensitive to rate expectations: when the Fed sounded dovish last year, Bitcoin spiked as ETF money poured in.

On the other hand, stronger-than-expected economic data that reduces hopes of interest rate easing can also temporarily weigh on crypto prices.

Following June’s positive jobs report, traders sharply reduced bets on a near-term Fed rate cut, causing Bitcoin to briefly dip below $109,000.

Powell has so far emphasized prioritizing the fight against inflation and staying patient on easing, a position that has put him at odds with political pressures for immediate cuts.

This is why investors will be parsing his every word, and any signal of a dovish pivot (or lack thereof) is likely to ripple through the crypto market.

Will Softer US Economic Reports Fuel a Crypto Rally?

After the Fed makes its rate call, traders will focus on two big data releases: June’s Core PCE inflation report and the July jobs numbers.

The Core PCE, due Thursday, is expected to rise only 0.2% from May, which would put annual core inflation at roughly 2.7% (still slightly above the Fed’s 2% target).

If inflation comes in cooler than expected, investors expect the Fed to cut rates sooner, a scenario that usually lifts riskier assets like Bitcoin.

But if prices climb faster than forecast, those hopes will fade, and Bitcoin, Ethereum, and altcoins could see a quick pullback.

Similarly, Friday’s US employment report is forecast to show a further cooling in the labor market. After June’s payroll gains of 147,000 (which exceeded forecasts), analysts predict job growth has moderated in July amid more deliberate hiring by companies.

If the jobs data indeed comes in soft or weaker than expected, it would reinforce the narrative of a cooling economy, which is potentially a tailwind for BTC/ETH as traders anticipate a more dovish Fed stance.

Big Tech Earnings Could Set Tone for Crypto Market This Week

This week’s earnings parade, featuring more than 150 S&P 500 companies, including heavyweights like Meta, Apple, and Microsoft, could influence overall investor mood.

Strong results and upbeat guidance tend to boost risk appetite, which often spills over into Bitcoin buying, given its tight link to the NASDAQ.

On the other hand, a pessimistic outlook might affect the near-term sentiment and weigh on digital assets.

Traders will also digest fresh data on manufacturing activity, PMI surveys, and consumer confidence. This set of data would offer seasoned investors plenty of signals to fine-tune their short-term strategies.