Cryptocurrency investors are approaching what promises to be an intriguing September. Early in the week, Fed member Cook, dismissed by Trump, ironically retains access to his computer and office. The ongoing legal battle surrounding this issue adds another layer of tension. Meanwhile, before the recent BTC downturn, the Michigan report was also released, complicating the landscape further.
Decline of Cryptocurrencies
As the weekend approaches with its typical low trading volume, BTC has fallen to the $108,500 support level despite encouraging PCE figures. Although disappointing, volatility is ingrained in cryptocurrency’s nature. The fact that Cook still has access to his office does not bode well for upcoming days.
Key highlights from the Michigan report are as follows:
- Michigan Consumer Expectations Released: 55.9 (Expected: 57.5 Previous: 57.2)
- Michigan 5-Year Inflation Expectation Released: 3.5% (Expected: 3.9% Previous: 3.9%)
Economic Sentiments and Market Reaction
Short-term 1-year inflation expectations also mirrored previously announced figures, standing closely at 4.8%. Could these figures have sparked the decline? Compared to July, consumer confidence has dropped by around 6%, which is concerning. The sentiment is approximately 11% higher than the values seen in April and May, but over 10% lower than values 6 and 12 months ago, indicating less-than-ideal figures.
“Durable goods purchasing conditions have declined to the lowest value in a year, with current personal financial situations also dropping by 7%, both due to rising concerns over high prices. Expectations for business conditions and labor markets also contracted in August. Despite personal financial expectations remaining stable this month, they are still relatively low compared to one year ago.” – Michigan Sentiment Report
