Crypto Markets was unchanged on Monday and Tuesday after last week’s $1.5 billion liquidation flash, but traders are cautious ahead of the critical execution of US economic data that could set the tone for October.
The Bitcoin Bulls defended their $110,000 support level several times last week, but the ether returned to $4,075 from the sharp dip, wiping out nearly $5 billion in leveraged long.
The total market capitalization is currently at nearly $3.85 trillion, nearly 1.3% lower than a week ago, despite a 3.5% weekend rebound.
The Fed’s latest interest rate cuts initially provided a modest boost to Bitcoin, but investors say it will rely more on past easing than Powell’s Tuesday speech and upcoming job data data, which is scheduled to be released at 8:30am ET on Friday.
“The crypto market is at a macroeconomic crossroads, sandwiched between the softened labor market and resilient economic growth,” said Nick Ruck, director of LVRG Research, in a message to Coindesk.
“This week’s data – consumer confidence, first unemployment claims, and the pivotal September employment report – are important in measuring the Fed’s next move. Signs of further labor market cooling could reduce rate expectations and provide tailbone for majors such as BTC, ETH, and XRP.
Employment data shows how many people in the US economy are getting or losing jobs. Less workers and rising unemployment suggest that the economy is slowing.
This generally makes the Federal Reserve more likely to cut interest rates to support growth. This could improve risky assets such as stocks and crypto. However, if jobs are strong and unemployment remains low, it indicates that the economy is still hot. This will keep inflation high and less likely to cut Fed interest rates.
“This macro uncertainty is likely to maintain Bitcoin’s advantage and, despite its excellent yield opportunities, could curb the benefits of Ethereum and the broader debt sector,” Lack added.
The market structure reflects indecisiveness. Sentiment gauges fell to 28 on Friday and entered “extreme fear” before bounced back to neutral 50 by Monday. Bitcoin has been consolidated in a tight range of $108,000 to $118,000, with open interest reduced and funding rates normalized after liquidation.
“The rebounds come from roughly the same level as early September,” said Alex Kuptsikevich, senior market analyst at FXPRO. “And again, the altcoin is recovering stronger than BTC. Such outperformance in the early stages of recovery often indicates the future winner of the race. In this case, this is an altcoin.”
Kuptsikevich said that Bitcoin’s technology level remains extremely important. “At the end of last week, Bitcoin found support at 109,000. It was purchased at about the same level as the end of August, and is positive for the Bulls.”
“On the other hand, local highs in September are lower than previous highs. This generally indicates a stronger move towards a decline in volatility and breakouts beyond the 108-118K range. Movements within range can give many false short-term signals,” he pointed out.
Ethereum faces its own inflection point. Analysts flagged a potential bottom, citing technical fatigue after the sale last week. The tokens are still focused on BlackRock and Fidelity applications during SEC reviews after the launch of the first US ETF with staking capabilities from Rex Shares and Osprey Funds.
News about Solana has been added to the Altcoin story. The network’s total has been locked, increasing 57% since June, prompting new calls for a price target of $300. Memecoin has also grown more pronounced, with sector capital gains by 70% in three months.
However, the regulatory headlines kept traders on alert. The Wall Street Journal reported that US regulators are investigating potential insider transactions related to companies accumulating crypto reserves.
Elsewhere, Ratings giant Moody’s individually warned that the rapid expansion of stubcoin use in developing countries poses risks to financial sovereignty and economic stability.