Bitcoin’s (BTC) weekend decline to the $112,000 support pushed the cryptocurrency market to a three-week low. The market’s risk appetite has been affected by new import tariffs set to take effect under the Trump administration on August 7 and the weak employment data for July released last week. Even though trade talks between the United States and China have resumed, the review scheduled on August 12 keeps uncertainties alive. A combination of critical PMI data and a speech by Federal Reserve Chairman Jerome Powell could bring new volatility waves to the markets.
Critical Week Begins for Markets
An executive order signed by Donald Trump to expand import tariffs will impose new costs on the global supply chain. On August 5, the S&P Global Services PMI and ISM Services PMI data will be released. These could shake the markets by providing additional signals of a slowing U.S. economy following the disappointing employment data released last week.
Meanwhile, Fed Chairman Jerome Powell will scrutinize the markets during the Kansas City Fed’s annual policy forum this week. Bill Adams, Chief Economist at Comerica Bank, notes, “The weak employment data in July increases pressure on the Fed for a rate cut by year-end.” Unemployment benefit claims due on August 8 will also shed light on the employment outlook.
On the corporate front, the earnings season continues. Second-quarter results from Palantir and AMD, as described by Kobeissi Letter, are among developments that “could intensify fluctuations in August.” The robust quarterly results of technology and AI giants are increasing volatility in indices, influencing the decision-making processes of cryptocurrency investors.
Bitcoin and Ethereum Hold Critical Supports
Following the weekend hit, the total value of the cryptocurrency market rebounded to $3.8 trillion by Monday morning, August 4. Although Bitcoin 
$75,800 rose to $114,500, it remains 6.7% below its all-time high. Historically, August is known for weak returns for the leading cryptocurrency, which supports a cautious outlook in the short term.
Ethereum 
$2,352, responding from the $3,400 threshold, has returned to the $3,560 range but remains within a narrow trading channel. Market analysts suggest that while both cryptocurrencies maintain critical support levels, uncertainties will persist. However, tomorrow’s PMI data releases or dovish messages from Powell could act as a catalyst for a rally.
