Bitcoin (BTC) crossed the $87,000 mark early Monday, while solana (SOL), xrp (XRP), and dogecoin (DOGE) each gained over 4% at the week’s start, as traders looked ahead to further U.S. economic data for insights on future positioning.
Over the weekend, Bitcoin mostly lingered around $85,000, held back by inflation concerns and the overall state of the U.S. economy. SOL outperformed other major cryptocurrencies with a 5% increase in the last 24 hours, whereas tron’s TRX led the decline, falling 4% after last week’s surge driven by memecoins.
A cautious sentiment remains, though it has softened with reports indicating that U.S. tariffs scheduled for April 2 might be less severe than initially anticipated.
“Investors are exercising caution ahead of upcoming pricing movements due to uncertainty,” remarked Nick Ruck, director at LVRG Research, in a Telegram message. “This week’s U.S. economic data on consumer confidence, personal spending, and PCE will likely reveal whether American consumers can navigate these economic shifts or are bracing for reduced expenditures and tighter budgets.”
Consumer confidence gauges Americans’ optimism about the economy—higher confidence typically spurs spending, while lower confidence encourages saving. Personal spending reflects the volume of purchases made, a crucial driver of economic growth. PCE, or Personal Consumption Expenditures, serves as a key inflation indicator, showing changes in prices for goods and services.
These economic indicators can greatly impact cryptocurrency markets. Strong consumer confidence and spending may indicate a healthy economy, potentially leading to higher crypto prices as people invest more in higher-risk assets. Conversely, rising PCE could alarm investors, driving them toward cryptocurrencies as a safeguard against a depreciating dollar. However, if confidence wanes and spending decreases, it might signify an economic downturn, causing investors to act cautiously and suppressing crypto prices.
Some traders contend that the U.S. economy is more robust than previously believed, identifying current price points as attractive for buyers with a medium- to long-term optimistic outlook.
“’Hard’ economic data from the U.S. remains strong and contrasts with the sentiment, suggesting an overestimation of the current weakness against the underlying fundamentals,” said Augustine Fan, head of insights at SignalPlus, in an email. “Macro analysts have typically exhibited more caution in their evaluations than the actual circumstances indicate, and we believe that the genuine economic situation is stronger than many fear.”
“The crypto markets experienced a relatively quiet week, with prices remaining within a range and recovering from recent lows in response to equity trends. From a technical perspective, prices are still on a negative downward trajectory but are finding stability around critical support levels, with ETH resting at the upper end of its 2022 range and the next significant support around the $1500 threshold,” Fan noted.
This outlook for Ether coincides with a period of low 24-hour revenue for the blockchain, resulting in daily burns reaching unprecedented lows.
A burn permanently eliminates a token from circulation by directing it to an inaccessible address. Ether burns began with the Ethereum EIP-1559 upgrade in August 2021, which initiated the automatic burning of all base fees collected from users on transactions.
Transactional activity has seen a downturn in recent months, driven by an increasing preference for lower-cost networks like Solana and Tron, as well as a general decrease in speculative trading activity since late January.
Only 50 ETH was burned on Sunday, according to available data, marking a record low and a staggering 99% decline from the peak of 71,000 ETH burned on May 1, 2022. Daily burns have steadily declined since early 2023, fluctuating between 500 ETH and over 3,000 ETH.