Ethereum
Why is crypto down today? BTC and ETH uncertainty amid economic data and central bank decisions
TLDR
- The crypto market is seeing a slowdown, with Bitcoin and Ethereum trading below $68,000 and $3,600, respectively.
- Investors await crucial economic data and results from the next FOMC meeting on June 12.
- Despite the market slowdown, institutions and businesses are looking to gain exposure to cryptocurrencies this year.
- CPI inflation and core CPI are estimated at 3.4% and 3.5%, respectively, and investors are closely watching the Fed’s interest rate decision.
- QCP Capital suggests that the current price decline following the US jobs report provides a good buying opportunity.
The cryptocurrency market started the week on a bearish note, with major coins like Bitcoin and Ethereum seeing significant price drops.
This slowdown comes as investors eagerly await the release of crucial economic data and the results of the next meeting of the Federal Open Market Committee (FOMC), both scheduled for Wednesday, June 12.
Bitcoin, the world’s largest cryptocurrency by market capitalization, has fallen below the $68,000 level, while Ethereum, the second largest, is trading below $3,600.
The bearish market sentiment can be attributed to the uncertainty surrounding upcoming events and their potential impact on the global economy.
Despite the current market slowdown, institutional interest in cryptocurrencies remains strong. This sentiment is echoed by recent inflows into Bitcoin spot ETFs, which saw 19 consecutive days of net inflows before experiencing a single-day outflow of $64.9318 million on June 10.
The crypto market’s performance this week will likely be influenced by the release of the Consumer Price Index (CPI) report and the results of the FOMC meeting.
CPI inflation is estimated at 3.4%, while core CPI is expected to be 3.5%. Investors are also closely watching the Fed’s interest rate decision, with the CME FedWatch tool indicating that the market strongly expects the Fed to keep rates between 525 and 550 basis points.
Crypto analyst Markus Thielen of 10x Research provides insight into potential market reaction based on CPI data. If the CPI shows at 3.3% or lower, Thielen suggests that Bitcoin could attempt to escape.
However, if the CPI is 3.5% or higher, he believes Bitcoin will likely correct over the next few weeks, although this is not his base case scenario. Despite the potential correction, Thielen maintains an upward bias towards higher Bitcoin prices.
Recent U.S. jobs data, which beat expectations, dampened hopes of a Federal Reserve rate cut in September.
However, Singapore-based trading firm QCP Capital believes this price drop following the US jobs report represents a good buying opportunity. They argue that the Federal Reserve would struggle to maintain high interest rates as other central banks reduce borrowing costs.
The European Central Bank And The Bank of Canada already cut rates last weekmarking the start of a cycle of monetary easing by the Group of Seven (G7) countries.
QCP Capital suggests that other central banks, including the Federal Reserve, may soon join the battle by cutting rates, leading to increased market liquidity and boosting demand for alternative investments like cryptocurrencies.