Crypto Market Rises Amid Fed Rate Cut Speculation; Key Data Releases Ahead

The crypto market experienced a strong upswing last week, driven by speculation about a possible Federal Reserve rate cut in September.

Bitcoin approached $65,000 over the weekend, while Ethereum traded around $2,800. Attention is now turning to the upcoming US PCE data and other significant events that could influence market sentiment.

Recent statements from Federal Reserve officials have boosted market optimism. Comments from Fed Chair Jerome Powell and other officials suggest a shift towards a more accommodative monetary policy, increasing expectations of a rate cut in September. This has contributed to the recent crypto market rally.

In the coming week, market participants will be closely watching additional comments from Fed officials. San Francisco Fed President Mary Daly is set to appear in a TV interview on Monday, August 26, followed by remarks from Atlanta Fed President Raphael Bostic on Wednesday, August 28. Their statements are anticipated to align with the dovish tone of recent comments, but any unexpected hawkish signals could prompt concerns and potentially trigger a selloff in both the broader financial and crypto markets.

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The market is also keenly awaiting the US PCE inflation data, which will offer insights into inflationary trends. For July, the PCE inflation rate is projected to rise to 0.2% from 0.1% in June, while the year-over-year figure is expected to remain steady at 2.5%. Core PCE inflation is anticipated to hold at 0.2% monthly and increase to 2.7% year-over-year, up from 2.6% in June. A higher-than-expected inflation rate could dampen investor confidence.

Additionally, the second revision of Q2 US GDP data is scheduled for release on Thursday, August 29, which could provide further insights into the US economic condition and impact both stock and crypto markets.

Despite last week’s surge in crypto prices, investors should remain cautious and conduct thorough research due to the current market volatility.

Alexander Stefanov