Bitcoin and Ethereum have cooled off after last week’s rally, as traders look ahead to key U.S. macroeconomic events. Jerome Powell, the U.S. Federal Reserve Chair, will address the National Association for Business Economics later today. The crypto market is eagerly awaiting his comments, especially on inflation and interest rates. Plus, the U.S. non-farm payrolls report, expected on Friday, adds another layer of suspense. Both Bitcoin and Ethereum prices dipped in the past 24 hours, possibly reflecting caution ahead of these developments.
Bitcoin’s Recent Slide: Overbought Territory?
Bitcoin slipped by 2.09% over the past day, now hovering around $64,403, according to The Block’s data. Just days ago, it almost hit $66,500, marking its highest point since July. The sharp rise followed lower-than-expected U.S. personal consumption expenditure (PCE) data, which fueled optimism in risk markets. At the same time, China announced strong stimulus measures aimed at boosting its economy. This combo gave Bitcoin a lift, but analysts now see signs of exhaustion.
Rachael Lucas, a crypto analyst at BTC Markets, pointed out that Bitcoin looks overbought on the daily chart. “Momentum has faded,” she noted, as the price rolled over after its recent high. Traders seem cautious, unsure whether Powell’s speech will bring any surprises. If Powell turns hawkish, meaning he might indicate more rate hikes, the current “risk-off” sentiment could deepen.
Ethereum Stumbles After Breaking Key Levels
Ethereum, the second-largest cryptocurrency, is also struggling. Its price dropped by 1.69% over the last 24 hours, standing at $2,626. According to Lucas, Ethereum lost momentum after it briefly broke through its 50-day simple moving average last week. The market appears to be in a wait-and-see mode, with traders expecting Powell’s tone to influence further moves.
As for the U.S. labor market data on Friday, it’s another key event on the radar. August showed a weakening trend, but many are expecting better numbers for September. This could have a significant impact on crypto prices, given the ongoing correlation between crypto and traditional markets.
Crypto Market Outlook: Mixed Sentiment
Despite today’s dip, some remain optimistic about crypto prices. Augustine Fan, SOFA.org’s Head of Insights, doesn’t think Powell’s speech will rock the boat. He sees Powell sticking to his usual script, especially with inflation data working in his favor. Fan believes the broader macro environment remains favorable for crypto, with supportive trends expected to persist into Q4.
However, Lucas from BTC Markets warned that stronger-than-expected payroll data could bolster the Fed’s current stance on interest rates, which might weigh on risk assets like Bitcoin and Ethereum. The market is also watching political developments, with Fan noting Kamala Harris’s recent pro-crypto comments. This political factor might contribute to a bullish bias in the short term.
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