Markets
Weekly Crypto Market Update: So Where Is Bitcoin Heading Now?
Last week, the ADP Employment report showed that US private companies hired about 152,000 workers, lower than expected and lower than the revised 188,000 from the previous month. Economists had predicted a reading of 173,000. The lowest additions to the US private sector come a day after US job openings fell to their lowest level since February 2021. These readings could signal potential weakness in the US labor market going forward.
However, at the end of the week, the US Department of Labor reported a mixed result, as the US economy created about 272,000 new jobs in May 2024, a number much higher than the 180,000 as economists had expected. This is a strong increase in new jobs and indicates that U.S. employment remains solid to this point. However, care must be taken when drawing final conclusions from this report, as these numbers have been repeatedly revised downwards in recent months. It was a mixed report as the unemployment rate rose from 3.9% to 4.0%. As a result, it was sold within minutes of the report being published.
source: altFINS.com
The CMC Crypto Fear & Greed Index, which is the digital asset market sentiment indicator, remained around 61.00 from the previous week, indicating “Greed”. We saw that the total cryptocurrency market cap rose slightly by around 0.8% to $2.55 trillion on Monday compared to the previous week, with Bitcoin’s (ETH) dominance fluctuating around of 17.5%, while Bitcoin (BTC) dominance hovered around 54%. USDT dominance fluctuates around 4.4%, which is nearly 50% lower than its peak in January 2023, indicating that funds were gradually shifting from stablecoins to altcoins over the past year and a half.
TOP WEEKLY CRYPTO WINNERS AND LOSERS – Based on altFINS crypto
source: altFINS.com
Top winners:
+19.2%
+16.6%
+10.7
Top losers:
-14%
-14.8%
-15%
SO WHERE IS BITCOIN GOING?
Bitcoin (Bitcoin) briefly crossed the psychological $72,000 mark on Friday, June 7, 2024, only to experience a flash sale to $68,420. The rapid sell-off may have been caused by better-than-expected employment results in the US, indicating that the Fed may have more time to keep rates on hold. It could also have been affected by the expiration of futures options worth about $2.2 billion, including about $1.2 billion expiring at about $69,500. Normally, when we are close to options expiration, the price tends to be volatile. In terms of Bitcoin ETF spot flows, collectively, the 11 ETFs accumulated around $1.8 billion in combined net inflows last week.
As the $72,000 mark has not yet been turned into support, Bitcoin (Bitcoin) continues to consolidate as it trades within a sideways channel between $60,000 – $72,000. This consolidation could take a few more months before we see Bitcoin resuming its bull run. Macroeconomic developments are also supporting sideways trading as more data on US inflation and employment is needed before the Fed can take its next move on interest rates. If the $72,000 level does not hold, the price could now fall to the support zone of around $60,000 during June. If support does not hold, we may revisit the next support zone of $50,000 – $52,000. To stay updated on future BTC price developments and in-depth technical analysis, explore more at altFINS.
source: altFINS.com
WHAT TO EXPECT THIS WEEK
This week, the US Core CPI is expected to remain unchanged at 3.4% in May 2024. The US Core CPI is expected to fall slightly to 3.5% from 3.6% a month earlier. This time, the timing of the CPI report will coincide with the Fed’s monetary policy meeting and Fed Chairman Jerome Powell’s conference. Based on the CME FedWatch tool, rates are expected to remain unchanged over the next two meetings, with a 45% chance of a first rate cut in September 2024. I believe the Fed will be in wait-and-see mode throughout the third quarter. 2024, and perhaps until the end of the year – this depends on the evolution of inflation and employment in the US throughout the second half of the year. I think they will not reduce rates before the November 2024 presidential elections, as this could trigger new inflationary forces that would be detrimental to the incumbent president.
However, the ECB and Bank of Canada began a new easing cycle last week, with the BOC reducing them to 4.75% and the ECB to 3.75%, below an all-time high of 4%. I believe that once the Bank of England and the Fed follow suit, there will be a wake-up effect on risk assets like stocks and cryptocurrencies and could push some valuations to all-time highs.