The crypto market saw major turbulence recently with Bitcoin reaching an all-time high of $109,000 following Donald Trump’s inauguration on 20 January 2025, and then falling by more than 5% to trade just below the $100k mark as of today morning.
Ethereum (ETH) has seen an even steeper decline, dropping over 6% to $3,100. Altcoins like Solana (SOL), Dogecoin (DOGE), and Sui (SUI) have also posted substantial losses, contributing to a 5.3% drop in total crypto market capitalization, which now stands at $3.56 trillion.
WHY ARE BITCOIN AND CRYPTO
DUMPING?IN THE PAST FEW HOURS, BTC IS
DOWN OVER 5%, WHILE LARGE
CAPS ARE DOWN 8%-10%THIS HAS NOTHING TO DO WITH THE
CRYPTO MARKET AND EVERYTHING
TO DO WITH THE US STOCK MARKET.THE US STOCK MARKET IS DUMPING
TODAY, AND IT’S JUST BECAUSE OF… pic.twitter.com/F0TyCgDMro— Ash Crypto (@Ashcryptoreal) January 27, 2025
Furthermore, this week is set to be a pivotal one for the cryptocurrency market as key economic data from the US, including GDP growth estimates and inflation metrics, are expected to influence investor sentiment and market trends.
Crypto could face further volatility depending on the outcomes of these economic indicators.
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Q4 GDP Growth Estimate, FOMC Meeting, Inflation Data
Several major US economic events are scheduled between 27 January 2025 and 31 January 2025 could significantly impact crypto markets:
Tuesday, 28 January 2025, Consumer Confidence Index – This insight into consumer sentiment and spending trends could determine a lot. A higher-than-expected reading could signal robust economic activity, potentially diverting investments away from riskier assets like cryptocurrencies. Conversely, weaker consumer confidence might support dovish Federal Reserve policies, increasing liquidity and benefiting Bitcoin as an alternative store of value.
Wednesday, 29 January 2025, Federal Reserve Meeting – The first Federal Open Market Committee (FOMC) meeting of 2025 will outline monetary policy under the new administration. Any hints of rate cuts could buoy crypto prices by reducing borrowing costs and increasing liquidity.
Thursday, 30 January 2025, Q4 GDP Growth Estimate – Experts project that US GDP growth slowed to 2.7% in Q4 2024 from 3.1% in Q3. A higher-than-expected reading could dampen expectations for rate cuts, pressuring crypto markets further. Conversely, a weaker GDP figure could provide justification for monetary easing, potentially supporting crypto assets.
Friday, 31 January 2025, Core Personal Consumption Expenditures (PCE) Inflation Data – As the Federal Reserve’s preferred inflation gauge, this report will be closely watched for signs of inflationary pressures. Higher-than-expected inflation could prompt investors to seek hedges like Bitcoin, while softer inflation figures might reduce demand for cryptocurrencies.
Tech Earnings Reports – In addition to macroeconomic data, earnings reports from tech giants such as Microsoft, Tesla, Meta Platforms, and Apple are expected this week.
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Trump Administrations’ Potential Impact
Trump’s administration is expected to push for Federal Reserve rate cuts while implementing policies aimed at stimulating economic growth through tax reductions and infrastructure spending.
It is worth noting that the corelation between BTC and traditional financial indices like the Nasdaq has increased recently, suggesting that macroeconomic factors are playing a larger role in shaping crypto market trends. For instance, strong tech earnings or dovish Fed signals could boost both equities and cryptocurrencies. However, if traditional markets face headwinds due to disappointing earnings or economic data, cryptocurrencies may not escape unscathed.
The post This Week In Crypto: What Impact Will US GDP And Inflation Data Have? appeared first on 99Bitcoins.
