Key Points
- Bitcoin and altcoins experience selling pressure, with markets anticipating volatility due to upcoming US Federal Reserve Chair speech and US jobs data release.
- Major macro events this week include Fed Chair Powell’s speech and the US non-farm payrolls report, both of which could impact crypto markets.
Bitcoin and altcoins are facing selling pressure in the early Asian trading hours. This is as the market prepares for possible volatility ahead of a speech by US Federal Reserve Chair Jerome Powell and the release of US jobs data expected on Friday.
Bitcoin’s price has dropped over 2% and is currently trading at $64,217 levels with a market cap of $1.269 trillion. Last Friday, the BTC price reached its highest level since July, peaking at $66,500. This price rally was largely influenced by lower-than-expected personal consumption expenditure (PCE) data.
China’s Central Bank Boosts Liquidity
In addition, the People’s Bank of China (PBoC) announced a significant liquidity boost, infusing $140 billion into the economy. This move is intended to stimulate its weakening economy. Reports indicate that Chinese investors are seeking a safe haven in Bitcoin amid these fragile economic conditions.
Rachael Lucas, a crypto analyst at BTC Markets, commented on the situation, saying, “Bitcoin appears overbought on the daily chart, with its price rolling over after reaching a high of $66,498 on Friday. Since [last week], momentum has faded.”
Altcoins are also experiencing a steep correction, with Ethereum, BNB Coin, and others correcting 2-4%. Meme coins such as Dogecoin, Shiba Inu, and Pepe Coin, which had strong performances last week, have corrected between 5-10% today.
Upcoming Macro Events
Crypto investors are keeping a close eye on two major macro developments this week. Later today, Fed Chair Powell will deliver a speech at the National Association for Business Economics. Additionally, the US non-farm payrolls report is due on Friday.
The Fed Chair is expected to discuss the economic outlook and provide insights into the Fed’s monetary policy. Lucas stated: “Powell’s comments, particularly on inflation and interest rates, often move markets, and crypto is no exception. Any hawkish tone could further fuel risk-off sentiment, contributing to today’s declines.”
However, some market analysts believe that Powell won’t announce anything that is market-moving. Augustine Fan, SOFA.org Head of Insights, said: “Investors are likely expecting him to speak more of the same as per the last FOMC, especially with the recent inflation data moving in his favor since his last dovish Q&A.”
The US Labor Department will release its monthly non-farm payrolls report this Friday. This report provides insight into the nation’s job market and economic health. Despite August’s data reflecting a softening labor market, BTC Markets’ Lucas noted that the markets anticipate improvement in the September figures. “Stronger-than-expected employment data could bolster the Fed’s current stance on interest rates, potentially benefiting risk-on assets like Bitcoin and Ethereum,” Lucas stated.
