A cautious market sentiment persisted on Monday, though it showed signs of easing following reports indicating that the impending U.S. tariffs, set to take effect on April 2, may be less severe than initially anticipated.
Bitcoin (BTC) briefly surpassed $87,000 early Monday, while Solana (SOL), XRP (XRP), and Dogecoin (DOGE) each saw gains exceeding 4%, marking a strong start to the week. Investors kept a close watch on upcoming U.S. economic data releases for insights into future market positioning.
Over the weekend, Bitcoin largely hovered around the $85,000 mark, influenced by concerns over inflation and the broader U.S. economy. Among major cryptocurrencies, SOL led with a 5% increase over the past 24 hours, whereas Tron’s TRX saw the biggest decline, dropping 4% as it continued to pare back gains from last week’s memecoin-driven rally.
“Investors remain cautious about upcoming price movements due to prevailing uncertainty,” noted Nick Ruck, director at LVRG Research, in a Telegram message. “This week’s U.S. economic reports on consumer confidence, personal spending, and the PCE index will be crucial in determining whether American consumers are adapting to economic changes or preparing for more conservative spending habits.”
Consumer confidence measures public sentiment about economic conditions, with higher confidence generally leading to increased spending. Personal spending tracks consumer purchases, a key driver of economic growth. The Personal Consumption Expenditures (PCE) index, a critical inflation measure, reflects price shifts in goods and services.
These reports can significantly influence the crypto market. Strong consumer confidence and spending could indicate a healthy economy, potentially driving more investments into riskier assets like cryptocurrencies. Conversely, a high PCE index signaling rising inflation may push investors toward crypto as a hedge against a weakening dollar. However, if confidence wanes and spending contracts, it may indicate an economic slowdown, causing investors to adopt a more cautious approach, potentially dragging crypto prices lower.
Despite these uncertainties, some market participants believe the U.S. economy is more resilient than current sentiment suggests, making the current price levels attractive for long-term investors.
“U.S. ‘hard’ economic data continues to be strong despite softer market sentiment, suggesting that concerns about economic weakness may be overstated,” said Augustine Fan, head of insights at SignalPlus, in an email to CoinDesk. “Market observers have generally been more pessimistic than necessary, and we believe that underlying economic fundamentals remain robust.”
Fan further noted that crypto markets experienced a relatively quiet week, with prices largely rangebound and rebounding from recent lows, mirroring equity market trends. “Technically, prices remain in a downward trend but are stabilizing near key support levels, with ETH consolidating at the highs of its 2022 range. The next significant support level is around $1,500,” he added.
Ethereum’s outlook comes amid a decline in transactional activity, leading to one of the lowest 24-hour revenues for the blockchain in recent months and pushing daily token burns to a record low.
Token burning permanently removes coins from circulation by sending them to an irretrievable address. Ethereum introduced its burn mechanism in August 2021 through the EIP-1559 upgrade, which destroys all base transaction fees paid by users.
However, transactional activity on Ethereum has slowed in recent months, as users increasingly opt for more cost-effective alternatives such as Solana and Tron. Additionally, speculative trading has tapered off since late January.
On Sunday, only 50 ETH was burned—marking a record low and representing a nearly 99% decline from the all-time high of 71,000 ETH burned on May 1, 2022. Daily burns have been gradually decreasing since early 2023, fluctuating between 500 ETH and 3,000 ETH.
