The global digital assets market printed red indexes all around as all eyes are focusing on the US Federal Reserve, August retail sales data, jobless claims, and other crucial events this week. The cumulative crypto market cap dropped by over 3% to stand at $2.03 trillion while its 24 hour trading volume spiked by 42%.
Bitcoin (BTC) took a hit of 3% to drop below $59,000 after recording a much needed relief rally last weekend. The second biggest crypto, Ether (ETH), price dipped by 6% to continue its losing streak. Famous meme coins like Dogecoin (DOGE) and Shiba Inu (SHIB) also declined by almost 4% each.
Here comes the Fed week
Markets are nervously waiting for the much anticipated economic week ahead amid the increasing selling pressure. The investors are set to witness the August Retail sales data release on September 17. It will be followed by the Fed interest rate decision and press conference scheduled on September 18.
The same week will also see the release of the Philadelphia Fed Manufacturing Index and August existing Home Sales data on Thursday.
With the Fed’s first rate cut in four years expected, risk assets like crypto often get the benefit but the uncertainty around how much the Fed will cut is keeping investors on edge. Despite recording a decline in inflation since the last year, core inflation came in higher than expected. Investors are split over “will it be 25 or 50 basis points.
Many Fed officials argue for caution, recommending a 25bp cut to avoid stoking the flames of rising prices. Powell’s statements and the Fed’s updated projections could send ripples across all markets, not just crypto. A weakening job market suggests the Fed may already be behind. With rising unemployment and softer wage growth, major corporations are pushing for a 50bp cut.
BTC falls below $59K
This highly awaited decision would set a rhythm for the stocks, bonds, and crypto market. However, the Stocks ended the week on a high note ahead of a key Fed decision. Nasdaq led gains with a 6% jump, while the S&P 500 rose 4%, and the Dow Jones climbed 3%.
On the other hand, the crypto market saw a dump on Monday morning as BTC was unable to retain the $60K level. Bitcoin price dropped by 3% in the last 24 hours while it still stands strong with a gain of 7% over the past 7 days. BTC is trading at an average price of $58,649, at the press time.
The crypto market is trading under fear sentiments shows the index and has more to the selling pressure. The biggest of the digital assets like Solana (SOL) and Cardano (ADA) dropped by more than 4% each, in the last 24 hours.
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