- The cryptocurrency market saw Bitcoin and Ethereum retrace some of their recent gains in Asian trading on Monday as the market closely monitors upcoming key economic events.
- Traders are focusing on statements from Federal Reserve Chair Jerome Powell and the release of the latest U.S. labor market data set to be unveiled on Friday.
- Bitcoin prices fell 2.09% in the last 24 hours, trading at around $64,403, after recently touching a high of near $66,500, the highest point since July, fueled by lower-than-expected personal consumption expenditure (PCE) data and significant economic stimulus measures announced by China.
Bitcoin and Ethereum decline as market awaits key economic indicators from Federal Reserve Chair Powell and U.S. labor market data.
Bitcoin’s Short-Term Market Dynamics
Bitcoin has recently displayed signs of being overbought on the daily chart, pulling back from Friday’s peak of $66,498. This retracement comes as market momentum has decelerated since last week. Rachel Lucas, a cryptocurrency analyst at BTC Markets, highlighted that this pullback is a natural market reaction after a substantial upward move.
Ethereum’s Performance and Technological Milestones
Similar to Bitcoin, Ethereum has also struggled to maintain its strength. After breaking above its 50-day simple moving average last week, Ethereum has lost some of its momentum, showing a 1.69% drop over the past 24 hours to a trading price of $2,626. Lucas noted that Ethereum’s current price action reflects broader market cautiousness.
Key Economic Events Influencing Crypto Market Sentiment
Investors are keenly awaiting two pivotal macroeconomic events this week: Jerome Powell’s speech at the National Association for Business Economics and the U.S. non-farm payroll report due on Friday.
Impacts of Powell’s Economic Outlook
Powell is expected to discuss economic prospects and potentially shed light on future monetary policy. “Powell’s comments, particularly on inflation and interest rates, typically ripple through financial markets, including cryptocurrencies,” said Lucas. Any hawkish tone in Powell’s remarks could exacerbate risk aversion, contributing to further declines.
U.S. Labor Market Data Expectations
The U.S. Department of Labor is set to release its monthly non-farm payroll report, providing a snapshot of the nation’s employment landscape and economic health. Despite August’s weaker employment figures, Lucas from BTC Markets anticipates improvement in the September data. Stronger-than-expected employment numbers could support the Federal Reserve’s current interest rate policies, potentially benefiting risk assets like Bitcoin and Ethereum.
Short-Term Crypto Market Outlook
SOFA.org’s head of insights, Augustine Fang, expressed optimism regarding the short-term outlook for the crypto market. Fang mentioned that the correlation between cryptocurrencies and major macro assets, particularly the SP 500 (SPX), suggests a favorable macro environment would continue to provide strong tailwinds for crypto prices in the fourth quarter. Furthermore, recent pro-crypto rhetoric from the Kamala camp’s campaign indicates a positive sentiment that might encourage a ‘buy the dip’ strategy among investors.
Conclusion
In summary, the cryptocurrency market is experiencing a corrective phase as traders await clarity from critical economic indicators. Bitcoin and Ethereum, despite recent dips, are showing resilience, with market participants closely watching for cues from Federal Reserve statements and labor market data. As the macroeconomic backdrop evolves, these factors will significantly influence the direction of the crypto market in the coming weeks.
