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In the bottom left of every start of a ranked match its written

8-squid [gamemode] power
Power level : xxxx

What is that power level referring to? Does it impact the match in any way?

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The power level is the team's average matchmaking rating. In a splatfest, it will show you your matchmaking rating for the team that you chose (and it will display your team's "power level" and the enemy team's "power level", unlike ranked).

But in ranked mode, like you are doing in this screenshot, it will just give you the average for your team. It works just like the original splatoon's power level did, except the numbers are a little higher.

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