The Cryptocurrency Market Outlook

The cryptocurrency market is poised for a volatile week ahead due to the release of U.S. inflation data. A testimony by Jerome Powell on monetary policy could also drive prices.

The cryptocurrency market seems to be consolidating after last week’s heightened volatility. At press time, Bitcoin (BTC) was trading at $96,865 after a slight 0.06% drop in 24 hours, while the largest altcoin Ethereum (ETH) had dropped by 0.9% to trade at $2,631.

The reduced volatility could end this week due to several key macroeconomic events influencing trader behavior.

U.S. CPI Data Impacting Crypto Market

The U.S. Consumer Price Index (CPI) data for January 2025 is due for release on Wednesday. In December, the total CPI increased to 2.9%, while the core CPI dropped to 3.2%.

This spike impacted the Federal Reserve’s decision to keep interest rates unchanged at 4.25%-4.5%. Market Watch forecasts that the CPI rate will drop to 2.8%, while the core rate will fall to 3.1%. This decline could trigger a positive economic outlook.

As inflation eases, the Federal Reserve might shift back to a dovish stance and resume interest rate cuts, which would bode well for the crypto market. However, the CME FedWatch Tool indicates that investors anticipate no change in interest rates during the Federal Open Market Committee (FOMC) meeting in March.

Fed Chair Appears Before Congress

Federal Reserve Chair, Jerome Powell, is expected to appear before the House Financial Services Committee and the Senate Banking Committee this week for his semi-annual monetary policy testimony.

In his testimony, Powell will provide an outlook on the economy, inflation, and potential rate cuts. If he signals easing monetary policy tightening, it could positively impact crypto. Conversely, a hawkish stance might generate negative sentiment.

Recently, Powell made pro-crypto remarks, suggesting U.S. banks can serve crypto customers if they can manage risks. If he reiterates this view, it could stimulate demand for digital assets.

Coinbase Q4 Earnings

U.S. exchange giant Coinbase will release its earnings report for the fourth quarter of 2025 later this week. Exceeding expectations could help COIN stock extend its gains after a 142% yearly increase.

While Coinbase’s performance doesn’t directly affect cryptocurrency prices, it could enhance confidence in the crypto market, improving market sentiment. Positive sentiment is often a catalyst for price growth.

At press time, the fear and greed index dropped to 43, indicating neutral sentiment. This may lead to stagnating cryptocurrency prices until buyers or sellers make their move.