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How Will This Week’s US GDP and Inflation Data Shake Crypto Markets?

Crypto markets are deep in the red this Monday morning in Asia, and key economic data from the US this week could rattle them further.

Markets reacted positively following Donald Trump’s inauguration last week, with a new all-time high for Bitcoin on Jan. 20, but things appear to be unraveling at the moment.

President Trump also pledged to demand Federal Reserve rate cuts following potential declines in oil prices. However, the likelihood of success remains uncertain.

“Meanwhile, we are just six days out from the February 1st tariff start date Trump set last week,” cautioned the Kobeissi Letter.

Economic Events Jan. 27 to 31

Consumer Confidence data will be released on Tuesday, and the first Fed meeting of 2025 will take place on Wednesday. This may offer some insight into monetary policies going forward under a new administration.

Thursday, we will see the fourth quarter GDP Growth Annualized advance estimate. This report provides early insight into changes in GDP, and economists project that the pace of growth slowed to 2.7% from 3.1% in the third quarter.

A higher-than-expected reading could further weigh on the expectations for Fed rate cuts, while a lower-than-expected reading could provide the central bank with data to support rate reductions.

December’s Core Personal Consumption Expenditures (PCE) report is due on Friday. This data reflects the average amount of money consumers spend monthly and is used by Fed policymakers as a primary gauge of inflation.

It is also a big earnings week for tech giants, with ‘Magnificent 7’ beginning to report revenues. Microsoft, Meta Platforms, and Tesla are scheduled to publish theirs on Wednesday after the close, with Apple reporting revenue on Thursday.

Crypto Market Tanks

Crypto market capitalization has dumped 5.3% over the past six hours, with $175 billion leaving the space, sending it down to $3.56 trillion.

Over the past 24 hours, 228,000 traders were liquidated with total wrecked positions at $615 million, according to Coinglass.

Bitcoin led the drop, falling a little over 5% to just under $100,000 at the time of writing during the Monday morning Asian trading session.

Ethereum has fared worse as usual dropping more than 6% over the past few hours to $3,100. The altcoins were a sea of red with larger losses for Solana (SOL), Dogecoin (DOGE), and Sui (SUI).

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