Crypto markets need to monitor several key US economic data points this week, given the abounding influence of macroeconomic events on Bitcoin (BTC).
Bitcoin is trading near the $95,000 range, with this week’s economic events likely to provoke its next directional bias.
Consumer Confidence
The University of Michigan will report the US consumer confidence on Tuesday, detailing buyer attitudes, buying intentions, vacation plans, expectations for inflation, stock prices, and interest rates.
After the previous consumer confidence index of 104.1, the consensus is a minor retraction to 102.4. This sentiment comes amid President Donald Trump’s policies, with Ark Invest’s Cathie Wood noting the new administration’s impact on spending.
“…today nearly a third of the labor force, and perhaps their families, could be holding back on spending until they see the impact of rapid policy changes. While we believe the changes will be net positive for the economy – perhaps massively so – the short-term uncertainty is palpable,” Wood explained.
Notably, consumer confidence data does not move crypto markets the way a Federal Reserve (Fed) rate hike might. However, it is a signal of how people are feeling about discretionary spending and investment. Crypto and Bitcoin, in particular, largely being a retail-driven market, are sensitive to that vibe.
Initial Jobless Claims
Thursday’s initial jobless claims report is also a key US economic data to watch this week. It measures the number of people filing for unemployment benefits for the first time in a week, serving as a real-time pulse on the labor market and broader economy.
As such, this report’s influence ties to how the data shapes investor sentiment, including expectations about monetary policy. When jobless claims rise unexpectedly, it signals potential economic weakness—think layoffs, slowing growth, or recession risks.
Investors often interpret this as a cue to dial back risk, pulling money from volatile assets like Bitcoin and cryptocurrencies in favor of safer bets like cash or bonds. Conversely, when initial jobless claims drop or come in lower than expected, it is a sign of labor market strength.
This can boost confidence, encouraging investors to invest in riskier assets, including crypto. A strong jobs picture might ease fears of aggressive rate hikes, giving Bitcoin room to climb—especially if it keeps its digital gold allure intact.
According to data from MarketWatch, after a previous reading of 219,000 jobless claims, economists anticipate a rise to 225,000 for the week ending February 22.
GDP
The US GDP report, scheduled for release this Thursday, could also significantly sway Bitcoin and cryptocurrency markets. Like consumer confidence and initial jobless claims, the data could shape investor perceptions of economic health and monetary policy direction.
A stronger-than-expected GDP figure might signal strong economic growth, potentially reducing Bitcoin’s appeal as a hedge against uncertainty. Investors could lean toward traditional assets like stocks, expecting tighter Federal Reserve policies to curb inflation.
This risk-off shift often pressures crypto prices downward, as Bitcoin’s correlation with equities has tightened recently. For instance, if GDP growth exceeds forecasts (above the projected 2.3% for Q4 2024), it might dampen hopes for rate cuts. Such an outcome would prompt a sell-off in speculative assets like crypto.
Conversely, a weaker-than-expected GDP report could fuel a crypto rally. If growth slows significantly, perhaps falling short of the prior quarter, it might stoke recession fears, pushing the Fed toward a more dovish stance with potential rate cuts.
This scenario often boosts Bitcoin’s allure as a digital gold or alternative store of value, especially if investors lose faith in fiat stability amid economic softness.
PCE
Another US economic data point to watch this week is the January PCE (Personal Consumption Expenditures), set for release on Friday. As the Fed’s preferred inflation gauge, this metric will give a fresh read on how price pressures are trending, potentially swaying expectations for interest rates and, by extension, risk assets like crypto.
If the PCE comes in hotter than expected, above the consensus estimate of 0.3% monthly growth for the headline index or 0.2% for the core, it might signal stubborn inflation. This could reduce the odds of near-term rate cuts, possibly spooking investors and dragging Bitcoin down as money flows out of speculative plays and into safer bets like bonds.
On the other hand, a cooler-than-expected PCE, which is closer to or below the Fed’s 2% annual target, could spark a rally.
“The idea of a 2% inflation target was first introduced by the Fed in 2012, when core PCE, the Fed’s preferred measure, was 1.8%. It was just an excuse to justify QE. For the first 99 years of the Fed’s existence, the unofficial target was zero, as the mandate was price stability,” Bitcoin critic Peter Schiff highlighted.
Lower inflation might fuel hopes that the Fed will ease rates sooner, maybe even at the March 19 meeting. This would make cheap money more available and boost the appetite for crypto.
Bitcoin has been sensitive to these macro cues lately, including its recent response to President Trump’s tariffs. Either way, investors should brace for possible volatility amid crypto’s tendency to react to these releases.
“PCE may be a bigger market mover than NVDA this week. Embrace the volatility,” one user on X observed.
BeInCrypto data shows Bitcoin was trading for $95,437 as of this writing, down by 1.1% since Monday’s session opened.
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