Crypto market awaits US PCE inflation and other important events. What to expect?

The crypto market saw a strong rally last week, with bets rising on a possible Fed rate cut in September. Bitcoin approached the $65,000 mark over the weekend, while Ethereum traded at $2,800. Now, the focus has shifted to the upcoming US PCE data, which would provide further clues on inflationary pressures in the country, among several other important events.

So let’s take a look at the key events and see how they might impact market sentiment in the coming week.

Remarks from US Federal Reserve officials influence market sentiment

Recent comments from Federal Reserve officials have so far fueled optimism in the market. For context, recent comments from several officials, including Fed Chairman Jerome Powell's speech, suggest that the Federal Reserve is moving toward a more dovish monetary policy going forward.

The dovish comments have reinforced bets on a possible rate cut by the US Federal Reserve at its next meeting in September, a move that has boosted market confidence, as evidenced by the recent rally in the crypto market.

Now the market is eagerly awaiting further signals from Fed officials in the coming week. On Monday, August 26, San Francisco Fed President Mary Daly is expected to give a television interview, followed by Atlanta Fed President Raphael Bostic's remarks on Wednesday, August 28.

The market expects her comments to come in line with the dovish statements made by other officials over the past week. However, it is worth noting that any other action, especially an aggressive statement, could raise further concerns among traders, leading to a potential sell-off across the financial sector, not to mention the crypto market.

Crypto market awaits US PCE inflation and revised GDP data

The broader financial market is eagerly awaiting the upcoming US PCE data to gain further clarity on inflation. According to market estimates, the US PCE inflation rate for July is expected to come in at 0.2%, up from 0.1% in the previous month. On an annual basis, it is expected to remain unchanged at 2.5%.

At the same time, core PCE numbers are expected to remain unchanged at 0.2%, while year-on-year they are expected to rise to 2.7% from 2.6% in June. However, if the number shows that inflation is higher than expected, it could dampen investor sentiment.

Recently, Fed Chair Jerome Powell hinted at a possible rate cut in September, which led to a rally in Bitcoin and Ethereum. However, he also said that the Fed will look at the upcoming numbers before making a decision. However, the upcoming PCE numbers will play a key role in the Fed's future stance on interest rates.

On the other hand, the release of the second revision of the US GDP data for the second quarter is expected on Thursday, August 29. It could provide insights into the economic health of the US, which could have potential implications for stocks as well as the crypto market.

Meanwhile, most cryptocurrencies saw a sharp rise last week, reflecting rising market optimism. Nevertheless, investors should place their bets with due diligence given the recent volatile situation dominating the market.