10.08.2026 17:40
In the crypto market this week, attention has turned to inflation and consumption data coming from the US. The three-day data flow starting on Wednesday could influence the direction of Bitcoin and altcoins through interest rate expectations.
Bitcoin (BTC) started the new week near the $65,000 mark. According to Coinbase data, the cryptocurrency was trading at approximately $64,950 at the time of writing, while Ethereum was hovering around $1,916. Investors are now focusing on how inflation might affect the U.S. Federal Reserve's (Fed) interest rate policy following weak employment data.
The previous trading week closed with a surprise data point. U.S. employment fell by 23,000 in July, against expectations of an increase of about 80,000. With previous months' data also revised significantly downward, the view that the labor market is weakening has strengthened.
The weak employment data was initially interpreted positively for risky assets. Because a slowing economy leaves the Fed with less reason to tighten monetary policy further. However, inflation risks persist, and data released this week will further clarify the outlook.
EYES ON WEDNESDAY'S CPI DATA
Wednesday's CPI report stands out as the week's most critical development. Last month, the data showed a significant decline. This decline is attributed to falling energy costs as tensions in the Middle East eased. The energy outlook has worsened since then.
Market expectations are for July's CPI data to come in at 3.4% year-over-year. Although Friday's employment data weakened rate hike expectations, an inflation reading exceeding forecasts could quickly reverse this outlook.
Strategists at one brokerage firm expect the Fed's decision not to raise rates to create a more supportive environment for assets. According to experts, if the Fed remains on hold, the dollar could experience a modest decline towards the end of the year, potentially boosting risk appetite. However, a CPI reading exceeding expectations could weaken this scenario and re-amplify the impact of bond yields and the dollar in the crypto market.
PPI AND RETAIL SALES TO BE MONITORED
The second data point on the inflation front will be Thursday's producer price index (PPI). This indicator, which measures changes in producer prices, is generally considered less influential than CPI. However, a significant downside surprise could reinforce concerns that price pressures remain high.
Friday's July retail sales data could be the week's surprise determinant. Strong consumer spending could show that the U.S. economy remains resilient despite weak employment figures. While seemingly positive on the surface, this scenario could provide the Fed with further justification to maintain its tight monetary policy in the current environment. Conversely, weak retail sales data would strengthen the view that the economy is slowing and could reduce the need for additional rate hikes.
Geopolitical uncertainty also continues to play a role in prices. As the war in the Middle East threatens critical oil transit routes, inflation expectations and, consequently, the likelihood of rate hikes could rise.