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- This week, investors are keeping an eye on three U.S. developments: jobless claims, the FOMC minutes, and Jerome Powell’s address.
- The crypto market has slipped 2.95% over the past day, with a total market cap now at $3.89 trillion as BTC drops to $115,000.
Crypto volatility isn’t happening in a vacuum. Monetary policy expectations, especially around rate direction, shape market psychology. If the FOMC minutes, jobless claims, or Powell’s Jackson Hole speech deliver surprises, crypto traders should expect swift and potentially significant moves. Any surprises from these events could spark sharp, immediate reactions across crypto markets.
Bitcoin (BTC) itself has been feeling the heat. After making a strong push toward a new all-time high at $124K, BTC has pulled back, slipping 2.72% in the past 24 hours and 5.47% over the past week.
Ethereum’s (ETH) story is similar; ETH broke above $4,000 on August 8, but today it’s trading around $4,253 after a 6.42% drop in just one day.
So, what comes next for Bitcoin and the altcoin market? Let’s break down the key events that could dictate this.
The FOMC Minutes
The next FOMC meeting minutes will be released on Wednesday, August 20, at 18:00 UTC. The Federal Open Market Committee (FOMC) meets eight scheduled times a year to discuss and set monetary policy, and its minutes from each meeting are released three weeks after the date of the policy decision. Why does this matter? Because the tone of those notes can swing markets. A dovish outlook, hinting at rate cuts, tends to lift risk assets like crypto.
Right now, traders are leaning toward the dovish side. The CME FedWatch Tool shows an 84.8% probability that the Fed will lower rates to the 4.00%–4.25% range at its September 17 meeting. That expectation comes despite inflation still running hot, with U.S. consumer prices rising 2.7% year-over-year in July.
The CryptoData stated on X that, “This will have large implications for QT ending and QE kicking into overdrive and alts starting their run. Although one thing to keep in mind is that this will get front-run. This could potentially lead to a “sell-the-news” event. Always be prepared for both scenarios. ”
The Initial Jobless Claims
Thursday brings the latest initial jobless claims data. A strong reading that could reinforce belief in a tight labor market, reducing hope for imminent rate cuts and pressuring risk assets.
If claims come in lower than expected, it signals a strong jobs market. This will, in turn, make the case for the Fed to keep rates higher for longer. That kind of reading usually puts pressure on risk assets, including crypto. On the flip side, if claims tick upward, it could hint at cracks in the labor market and fuel hopes for earlier rate cuts, something that tends to lift digital assets.
For the week ending August 9, jobless claims came in at 224,000, slightly below the prior week’s 226,000 and beating forecasts that pointed as high as 229,000. Looking ahead, economists polled by MarketWatch expect this week’s number to hold steady at around 224,000.
Jerome Powell
The annual Jackson Hole Symposium is set for Friday, August 22, and all eyes will be on Fed Chair Jerome Powell when he takes the stage at 10 a.m. ET. This event has a reputation for sparking wild market swings, what some traders call “seek and destroy” conditions, where surprise remarks can send prices sharply higher or lower in minutes.
With this likely to be his final appearance as Fed Chair, anticipation is especially high. Back in 2018, Powell made his Jackson Hole debut as Chair, and since then, each of his addresses has been closely dissected for clues on the Fed’s next moves. This year will be no different: crypto and traditional markets will be hanging on every word.
