Bitcoin Hits $87,000

Bitcoin (BTC) topped $87,000 early Monday, with Solana (SOL), XRP (XRP), and Dogecoin (DOGE) each gaining more than 4% to kick off the week positively. Traders are closely watching the upcoming U.S. economic data for hints on positioning.

Bitcoin largely hovered around $85,000 over the weekend due to inflation and broader economic concerns. SOL led the gains among major cryptocurrencies, rising by 5% in the last 24 hours, while Tron’s TRX saw a 4% loss after a recent memecoin-driven price surge.

A risk-off mood persists, although it has softened as the U.S. tariffs slated for April 2 may be less aggressive than originally anticipated.

> “Investors are remaining cautious on the upcoming price movements due to uncertainty,” Nick Ruck, director at LVRG Research, communicated via Telegram. “This week’s U.S. economic reports on consumer confidence, personal spending, and PCE may indicate whether American consumers can adapt to these economic changes or are preparing for tighter budgets.”

Consumer confidence reflects Americans’ optimism about the economy — high confidence leads to increased spending, whereas low confidence usually results in higher savings. Personal spending gauges how much people are buying, a significant driver of economic growth. PCE (Personal Consumption Expenditures) serves as a crucial inflation metric, indicating price shifts in goods and services.

These reports can impact crypto markets. Strong consumer confidence and spending can signal a robust economy, potentially uplifting crypto prices as investment in riskier assets increases. Conversely, high PCE readings (indicative of rising inflation) could lead investors to view crypto as a hedge against dollar weakness. In contrast, falling confidence and spending could hint at an economic downturn, causing caution among investors and pulling crypto prices down.

Some traders, however, believe the U.S. economy is more resilient than perceived, considering current price levels a good opportunity for medium to long-term bullish investors.

> “U.S. ‘hard’ economic data remains robust, contrasting with soft sentiment, suggesting an over-extrapolation of current weakness versus underlying fundamentals,” Augustine Fan, head of insights at SignalPlus, noted in an email to CoinDesk. “Macro observers have generally been more cautious than the actual reality, and we believe the underlying economy is stronger than feared.”

The crypto markets had a mostly quiet week, with prices remaining within a range and rebounding from recent lows, mirroring the equity action. Technically, prices are still on a downward trend but are stabilizing around key support levels, with ETH hovering near the highs of its 2022 range, and the next significant support level around 1500.

Ether’s outlook emerges as the blockchain experienced one of its lowest 24-hour revenues in recent months, leading to daily burns hitting a record low. A burn permanently removes tokens from circulation by sending them to an address not controlled by anyone. This process started in August 2021 with Ethereum’s EIP-1559 upgrade, which involved burning all base fees charged per transaction.

Transactional activity has waned over recent months as preferences shift toward cheaper networks like Solana and Tron, coupled with a general decline in speculative trading since late January.

Data shows that only 50 ETH was burned on Sunday, representing a record low and a nearly 99% decrease from the peak of 71,000 ETH burned on May 1, 2022. Daily burns have steadily decreased since early 2023, fluctuating between 500 ETH and over 3,000 ETH.