The crypto market was highly volatile last week as investors reacted to the recent liquidation that cost investors at least $19 billion in a single day. This week will likely be more volatile for the industry as investors react to some notable news. This article highlights some of the best crypto news to watch this week.
Crypto market to react to US inflation data
The first main crypto news to consider this week will be the US inflation data, which will come out on Friday. The Bureau of Labor Statistics (BLS) has pledged to publish this report despite the ongoing government shutdown because of the implications on the social security.
This data is important during the calculation of the cost-of-living adjustment (COLA). Analysts expect the report to show that the headline consumer price index (CPI) jumped from 2.9% in August to 3.1% in September.
The core CPI, which excludes the volatile food and energy products, is expected to move from 3.1% to 3.2%. If these numbers are accurate, they will have an impact on the Federal Reserve, which will deliver its interest rate decision a week later.
The crypto market does well when the Federal Reserve is cutting interest rates.
Top token unlocks
Cryptocurrency prices are normally affected by token unlocks, which increase the number of coins in circulation. Token unlocks are normally bearish, especially during a bar market.
Hundreds of tokens will be unlocked this week. Data compiled by DeFi Llama shows that tokens worth over $212 million will be unlocked in the next seven days. The figure will likely be much higher as the platform does not capture all the unlocks.
Some of the top tokens with large unlocks this week are LayerZero, which will unlock tokens worth over $40 million, representing 21% of those in circulation, TON, Kaito, EigenLayer, Mantra, Avalanche, and Axelar.
Crypto liquidations
The other notable catalyst for the crypto market will be liquidations, which have remained at an elevated level recently.
Over 1.6 million traders were liquidated on Friday as the crypto market crash accelerated. Total liquidations that day jumped to over $20 billion. Another 300k traders were liquidated last Friday as the amount jumped to over $1 billion.
The soaring liquidations explain why the crypto market pulled back last week as many of the liquidated ones stayed in the sidelines. Another surge in liquidations will likely drag the crypto market this week.
US and China trade talks
Meanwhile, the crypto market will react to the progress on US-China trade talks. Scott Bessent, the Treasury Secretary, confirmed that teams from the two sides will meet in Malaysia to prepare for the meeting between Donald Trump and China.
These talks are important as they will likely lead to de-escalation between the two sides. They will come at a time when China has spotted its leverage on the US and is using it to the maximum.
For example, it has unveiled measures to limit rare earth materials, a move that would impact US manufacturing. It has also announced targeted tariffs and an investigation on some companies.
A deal between the US and China would be highly bullish for the crypto market as it would reduce one of the top risks today. It will also lead to higher chances that the Federal Reserve will cut rates.
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