Crypto Market Braces for Volatility Ahead of Key U.S. Economic Events This Week

The crypto market could see a shift amid upcoming key economic events this week. This comes against the backdrop of a government shutdown that has now stretched into its 13th day with no resolution in sight.

What’s Ahead in the U.S. Economy This Week

According to The Kobeissi Letter, this week’s major events include the OPEC Monthly Report on Monday, Fed Chair Jerome Powell’s speech on Tuesday, the New York Fed Manufacturing Index on Wednesday, and the Philadelphia Fed Manufacturing Index alongside the NAHB Housing Market Index on Thursday. 

Around 10% of S&P 500 companies are also expected to report quarterly earnings, offering a snapshot of U.S. corporate health amid tightening financial conditions.

Powell’s remarks are being closely watched by traders who are curious about the Federal Reserve’s interest rate policy.  Any indications regarding the Fed’s intentions could have a significant impact on the crypto market following weeks of speculation.  Cryptocurrencies are heavily impacted by the Fed’s decisions.

Last week, Bitcoin briefly rallied past $123,000 after Powell refrained from commenting on economic policy at the Community Bank Conference. The lack of strong guidance from the Fed raised hopes that it might cut rates before the end of the year. 

Meanwhile, the FOMC minutes from September revealed that most officials now see room for additional rate cuts to support growth.

At the same time, earnings reports from S&P 500 companies will reveal whether corporate America is withstanding economic pressure or bracing for a slowdown. S&P Dow Jones Indices launched a new benchmark, the S&P Digital Markets 50. This is a hybrid index that tracks 15 major cryptocurrencies and 35 publicly traded blockchain-related firms. 

This project, which was developed in collaboration with Dinari, could bring new institutional funding to the crypto market.

Government Shutdown Extends Pressure On Crypto Market

Meanwhile, the U.S. government shutdown continues with no end in sight. Federal employees have begun receiving layoff warnings. Institutions such as the Smithsonian museums and the National Zoo have also closed temporarily. With neither chamber of Congress able to agree on spending bills, lawmakers are still at a standstill.

The prolonged shutdown also delays several key financial approvals. For example, the XRP ETF filings are still awaiting SEC review. Asset managers like Grayscale, Bitwise, and 21Shares have amended their registration documents. This suggests that preparations are ongoing despite bureaucratic delays.

Beyond monetary policy, several factors are affecting market sentiment. The OPEC Monthly Oil Market Report is expected to show global supply and demand trends. This report could influence inflation expectations. Oil supply and demand are important drivers of risk assets, including cryptocurrency.

Notably, the crypto market recovery has gained momentum following the recent market crash. Bitcoin reclaimed the $115,000 mark, while other coins also recorded modest gains.

Some experts say that this week could influence the rest of October. The crypto market is usually sensitive to bigger economic changes. Any unexpected news on inflation, oil prices, or Federal Reserve guidance could quickly affect Bitcoin, Ethereum, and other cryptocurrencies.