4 key triggers that could shake crypto markets in a highly volatile week ahead

Crypto markets are bracing for heightened volatility this week as investors navigate US tariff threats, a possible government shutdown, the Federal Reserve’s rate decision, major earnings reports, and fresh inflation data—all amid fragile technical levels for Bitcoin and altcoins.

Crypto markets are entering a turbulent week as global investors brace for a convergence of political, economic, and corporate developments that could amplify volatility across digital assets.

The week has already begun on a shaky note, with sharp price swings driven by macro uncertainty. Analysts warn that the coming five trading days could prove decisive for both traditional markets and cryptocurrencies.

1. US Tariff Threats and Political Uncertainty

Markets are closely watching renewed tariff rhetoric from US President Donald Trump, who over the weekend threatened Canada with 100% tariffs if it pursued a trade deal with China. While Canadian Prime Minister Mark Carney quickly played down those fears by stating that no such deal is planned, trade tensions remain a key overhang for risk assets, including crypto.

Adding to the uncertainty are rising odds of a partial US government shutdown. Government funding expires at the end of the week, and Senate Democrats have signaled opposition to the current funding package. Political brinkmanship in Washington has historically triggered volatility across global markets.

2. Federal Reserve Rate Decision

The Federal Reserve’s interest rate decision on Wednesday is one of the most closely watched events of the week. According to CME prediction markets, there is a 97% probability that rates will remain unchanged.

Even so, investors will scrutinize Chair Jerome Powell’s comments for any signals on future policy, particularly as inflation remains sticky and financial conditions tight. Any surprise in tone could quickly spill over into crypto markets.

3. Inflation Data and Consumer Sentiment

Fresh economic data is set to add further fuel to market swings. January’s US Consumer Confidence report, due Tuesday, will offer insight into household sentiment and spending expectations.

Later in the week, December’s Producer Price Index (PPI) data will provide a snapshot of inflation pressures at the producer level. Persistent inflation could reinforce expectations of higher-for-longer interest rates, weighing on speculative assets such as cryptocurrencies.

4. Big Tech Earnings and Risk Appetite

Four members of the so-called “Magnificent Seven” are reporting earnings this week, with Microsoft, Meta, and Tesla posting results on Wednesday, followed by Apple on Thursday.

Stock futures were already lower at the start of the week, reflecting investor nervousness ahead of these results. Any sharp moves in US equities—particularly tech stocks—could influence broader risk sentiment and spill into crypto markets.

Crypto Market Outlook

Crypto markets were firmly in the red during Monday’s Asian trading session. Total market capitalization fell 1.8% on the day to around $3 trillion.

Bitcoin led the decline, sliding to nearly $86,000—its lowest level in five weeks—before rebounding modestly to around $87,700. Analysts warn that Bitcoin is hovering near critical support levels, and a sustained breakdown could signal a deeper bearish phase.

Ether continued to weaken, briefly dropping below $2,800 and failing to stage a meaningful recovery. Altcoins followed suit, posting widespread losses as risk appetite deteriorated.

With macro risks mounting and technical levels under pressure, traders are bracing for a volatile week ahead. As one market watcher put it: “Buckle up.”