PMI, Fed Policy and Trump-Zelensky Summit to Move Crypto
Crypto markets remained mostly flat over the weekend, dipping late last week as Bitcoin and Ethereum pulled back. They started lower on Monday amid mounting macro uncertainty. Traders focus on Monday’s meeting between President Trump and President Zelensky. Trump suggested Zelensky “can end the war with Russia almost immediately,” a development that could boost investor confidence in crypto markets and broader risk assets.
Key economic events this week include August S&P Global Manufacturing and Services PMI data on Thursday and existing home sales. PMI is a leading economic indicator of business activity. Real estate data has minimal impact on risk-on assets. Fed Chair Powell’s Jackson Hole speech on Friday will be pivotal. A dovish tone may lift crypto prices. A hawkish stance could trigger sharp corrections. Futures markets currently price an 84.6% probability of a September rate cut.
On Monday in Asia, total crypto market capitalization fell to $4 trillion, down 6% from last week’s record. Bitcoin led losses, dropping 2.5% to $115,000, 6.9% off its peak. Ethereum slid to $4,345, 10% below its 2021 high. Altcoins were mixed: XRP, SOL, HYPE, and SUI fell, while LINK and XMR bucked the trend. Traders should monitor macro data and Fed signals for fresh volatility.
Neutral
The expected impact of this week’s events on the crypto market is neutral. Key drivers are mixed: a potential Trump-Zelensky agreement could spur risk-on sentiment and boost crypto assets, while hawkish signals from Fed Chair Powell at Jackson Hole could trigger market corrections. Similar past events—such as the 2022 US-Russia tensions easing followed by crypto rallies, or bullish Fed pivots leading to price surges—illustrate how both geopolitical breakthroughs and central bank policies can sway markets. However, the simultaneous release of PMI data introduces additional complexity. If PMI figures beat expectations, risk appetite may rise, supporting crypto prices. Conversely, a slowdown in business activity could depress trader sentiment. Given roughly equal probabilities of dovish and hawkish outcomes, and the twin uncertainties of geopolitics and economic data, short-term volatility is likely but directional bias remains unclear. Over the long term, sustained dovish Fed action and geopolitical de-escalation could underpin a bullish trend.