Weekly Update for the Crypto Market: So Where Is Bitcoin Heading Now?

Last week, the ADP Employment report showed that US private companies added around 152,000 workers, lower than expected and lower compared to a revised 188,000 from the previous month. Economists predicted a reading of 173,000. The lower additions to the US private sector come a day after job openings in the US slipped to their lowest level since February 2021. These readings may signal a potential weakening in the US labor market going forward.

However, later in the week, the US Labor department reported a mixed outcome as the US economy has added around 272,000 new jobs in May 2024, which was way higher than 180,000 as economists expected. This is a strong addition in new jobs, and it indicates the US employment remains solid up to this point. However, one must be careful to make final conclusions out of this report as these figures have been repeatedly revised down for the last several months. It was a mixed report because the unemployment rate rose to 4.0% from 3.9%. As a result, sold off few minutes after the report was published.

source: altFINS.com

The CMC Crypto Fear & Greed Index, which is the digital asset market sentiment indicator, remained at around 61.00 compared to the previous week, indicating “Greed”. We saw the total cryptocurrency market cap went slightly higher by around 0.8% to $2.55 trillion on Monday compared to a week ago, with ‘s (ETH) dominance floating at around 17.5% while Bitcoin (BTC)’s dominance hovered around 54%. The USDT dominance floats at around 4.4%, which is almost 50% lower from its peak in January 2023, indicating that funds were gradually shifting from stable coins to altcoins over the last year and a half.

TOP WEEKLY CRYPTO GAINERS & LOSERS – Based on altFINS’s Crypto

source: altFINS.com

Top gainers:

+19.2%
+16.6%
+10.7

Top losers:

-14%
-14.8%
-15%

SO, WHERE IS BITCOIN HEADING?

Bitcoin (BTC) has briefly crossed the $72,000 psychological mark on Friday, June 07th, 2024, just to experience a flash sell-off to $68,420. The rapid sell-off could have been caused by better-than-expected employment results in the US, indicating the Fed may have more time to keep rates unchanged. It also could have been affected by future options expiry amounting to around $2.2B, including around $1.2B expiring at around $69,500. Typically, when we are around the expiration of options price tend to be volatile. In terms of spot Bitcoin ETF flows, collectively, the 11 ETFs have accumulated around $1.8 billion in net inflows last week combined.

Since the $72,000 mark was not turned to support yet, Bitcoin (BTC) continues to consolidate as it trades within a sideway channel between $60,000 – $72,000. This consolidation may take another few months before we see Bitcoin resuming its bull run. Macroeconomic developments are also supporting sideways trading as more data on the U.S. inflation and employment is needed for the Fed to make its next move on interest rates. If the $72,000 level fails to hold, the price may now fall back to around $60,000 support zone during June. If the support fails to hold then we could revisit the next support zone of $50,000 – $52,000. To stay updated on future BTC price developments and detailed technical analysis, explore more on altFINS.

source: altFINS.com

WHAT TO EXPECT THIS WEEK

This week, the headline US CPI is expected to remain unchanged at 3.4% for May 2024. The core US CPI is expected to slightly drop to 3.5% from 3.6% a month earlier. This time, the CPI report timing will coincide with the Fed monetary policy meeting and Fed Chair Jerome Powell conference. Based on CME FedWatch Tool, rates are expected to remain unchanged for the next two meetings, with a 45% chance of a first rate cut in September 2024. I believe the Fed is going to be in wait-and-see mode throughout the Q3 2024, and perhaps even until end of the year – that depends on how the US inflation and employment develop throughout the 2nd half the year. I think they will not cut the rates before the presidential elections in November 2024 as it could trigger new inflationary forces that would be damaging for the incumbent president.

Nevertheless, the ECB and the Bank of Canada has started a new easing cycle last week, with BOC cutting them to 4.75% and the ECB to 3.75%, down from a record high of 4%. I believe that once the Bank of England and the Fed follow suit, it will be a reawakening effect on risky assets like stocks and cryptocurrencies and it may push some valuations to all-time-highs.