Crypto Markets on Edge: How Incoming U.S. Economic Indicators Could Affect Bitcoin’s Next Move

Key Insights

• Bitcoin's short-term price direction is likely going to be affected this week by US economic indicators like retail sales, jobless claims and the FOMC interest rate decision.
• Worse-than-expected retail sales or an increase in jobless claims could point to a weakening economy and could be bullish for Bitcoin.
• Lower interest rates make riskier assets like Bitcoin more appealing as a hedge against inflation.
• The FOMC is largely expected to keep interest rates steady, but a surprise rate cut could boost Bitcoin.
• Conversely, stronger retail sales or unchanged interest rates could lead to a stronger dollar and push Bitcoin downwards.

The crypto market, especially Bitcoin, has always been highly reactive to economic developments in the United States.

This week is no exception, and investors are keeping a close watch on three important economic indicators:

These include U.S. retail sales data, initial jobless claims and the upcoming Federal Reserve interest rate decision.

The outcome of these reports could play a major role in determining what comes next with Bitcoin in the short-term.

Here’s a breakdown of why these metrics matter, and how they could affect the crypto market.

Retail Sales as the First Domino in Market Sentiment

Retail sales data, which will be released by the U.S. Census Bureau, is one of the most important economic reports.

It offers insights into things like consumer spending, which, for context, accounts for about 70% of the U.S. economy.

When consumers spend, it usually points towards confidence in the economy. And when they do not spend, it means the exact opposite.

Readings from April 2025 saw retail sales rise by just 0.1%. Now, economists expect a more scary 0.6% decline in May.

If this prediction holds true, it could raise some red flags about consumer confidence weakening, especially due to the trade policies that shift everyday, or inflation pressures.

For the crypto market, If retail sales come in worse than expected, markets may interpret this as a signal that the U.S. economy is losing momentum.

This could increase expectations for the Federal Reserve to cut interest rates, a move that has historically boosted the price of Bitcoin.

Lower rates make traditional savings less attractive and riskier assets like Bitcoin more appealing.

On the flipside, if the data surprises with a flat or positive number, it could strengthen the dollar and lower the chances of a rate cut.

Bitcoin will likely feel some downward pressure, and a small dip could result.

Jobless Claims and the Labor Market

Next up is the initial jobless claims report, which is set to be released this Wednesday due to the Juneteenth holiday.

This data shows how many Americans are applying for unemployment benefits for the first time.

Said data is a real-time indicator of how strong (or weak) the labor market is.

Last week’s report showed 248,000 new claims, which is slightly above the forecast of 242,000.

Economists now expect that number to tick up again to around 250,000.

While this event is not exactly a catastrophe if it comes to light, an increase in jobless claims could indicate that cracks are starting to appear in the labor market.

This is important for Bitcoin investors because a softening labor market could push the Fed closer to a more welcoming stance.

More jobless claims tend to show that economic growth is slowing. Therefore, rate cuts have a higher chance of happening.

In turn, those cuts could spark a rally in Bitcoin.

FOMC Rate Decision as the Week’s Biggest Moment

The Federal Open Market Committee (FOMC) interest rate decision is the most expected event of the week.

The event is scheduled for Wednesday, and comes shortly after inflation data revealed a slight uptick in May.

This also stood as the first increase since February.

The FED’s long-term goal is to keep inflation around 2%. however, with recent data showing upward pressure, the central bank is facing a difficult choice.

It can either stay the course, or adjust its policy to keep the economy on track.

As it stands, the CME FedWatch Tool shows hat markets are almost certain (96.7% probability) that the Fed will keep rates unchanged in the 4.25% to 4.5% range. However, there’s still a small 3.3% chance of a surprise rate cut to 4.0%-4.25%.

If the FED does cut rates unexpectedly, the effect on Bitcoin could be massive, because lower rates reduce the appeal of yield-generating investments like bonds and savings accounts.

That makes Bitcoin more attractive to investors looking for protection from inflation.

On the flipside, if the Fed sticks to the script and holds rates steady, the market may not react much.

Overall, Bitcoin may not be entirely immune to macroeconomics.

However, in certain times, it tends to thrive. And whether or not this happens during the week, remains to be seen.

Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.