Bitcoin (BTC) topped $87,000 early Monday, marking a strong start to the week for major cryptocurrencies, including solana (SOL), xrp (XRP), and dogecoin (DOGE), which all experienced gains of over 4%. Traders are currently eyeing the forthcoming release of U.S. economic data to inform their positioning in the market.
Throughout the weekend, Bitcoin maintained a steady hover around $85,000, constrained by inflation concerns and economic indicators pertaining to the broader U.S. economy. Notably, SOL led the charge among significant cryptocurrencies, posting a 5% surge in the past 24 hours, while tron’s TRX fell by 4%, continuing its slide following a prior memecoin-led price bump the previous week.
Despite a prevailing risk-off sentiment among investors, the mood appears somewhat tempered amid reports suggesting that the U.S. tariffs set for April 2 might be less aggressive than initially anticipated.
“Investors are remaining cautious on the upcoming price movement due to uncertainty,” stated Nick Ruck, director at LVRG Research, in a recent Telegram message. “This week’s U.S. economic reports on consumer confidence, personal spending, and PCE will indicate whether American consumers are adapting to these economic changes or bracing for tighter budgets.”
The consumer confidence index serves as a reflection of how optimistic Americans are about the economy—high confidence denotes increased spending, whereas low confidence typically leads to increased saving. Personal spending tracks purchase behaviors, which significantly contribute to economic growth, while PCE (Personal Consumption Expenditures) is a critical inflation metric, showcasing price fluctuations for goods and services.
Such economic reports hold sway over cryptocurrency markets. Healthy metrics on consumer confidence and spending could signal a flourishing economy, thereby uplifting crypto prices as investors become more inclined towards riskier assets. Conversely, a high PCE figure indicating rising inflation might drive investors towards cryptocurrencies as a hedge against a depreciating dollar. Should consumer confidence wane and spending reduce, it could denote an economic downturn, instigating caution among investors and possibly pulling crypto prices down.
However, some traders argue that the current state of the U.S. economy may be stronger than perceived, suggesting that the present price levels represent a favorable buying opportunity for medium to long-term bullish investors.
“U.S. ‘hard’ economic data remains robust in contrast to softer sentiment, indicating an over-extrapolation of current weaknesses versus underlying fundamentals,” remarked Augustine Fan, head of insights at SignalPlus, to CoinDesk in an email. “Macro observers have generally been more cautious in their assessments than the underlying reality, and we assert that the economy remains stronger than feared.”
Meanwhile, the crypto markets displayed a similar level of calm, with prices largely stable and rebounding from recent lows in response to equity market movements. Technically, prices continue to trend downward, yet they are finding stability around key support levels, with Ether (ETH) settling near the upper range of its 2022 performance and a significant support level identified around the $1,500 mark.
Ether’s prospects are being scrutinized as the blockchain experiences one of its lowest revenues within a 24-hour period in recent times, pushing daily burns to unprecedented lows.
The process of burning tokens permanently removes them from circulation by dispatching them to inaccessible addresses. Ether burns commenced in August 2021 following Ethereum’s EIP-1559 upgrade, resulting in the systematic burning of base fees incurred by users per transaction.
Over recent months, transaction activity has waned as preference shifts towards more cost-effective networks such as Solana and Tron, alongside a notable decline in speculative trading activity since late January.
As reported, only 50 ETH was burned last Sunday, according to data, establishing a new record low and representing nearly a 99% decrease compared to the peak of 71,000 ETH burned on May 1, 2022. Daily burns have been gradually diminishing since early 2023, fluctuating between 500 ETH and over 3,000 ETH.
