- Bitcoin’s price is down more than 10% from its all-time high.
- Crypto pullback coincides with jitters in US stocks.
- New US jobs report due Friday could sway macroeconomic winds.
Bitcoin fell further on Monday morning to trade at almost $108,600, almost 10% below its $124,500 high on August 14.
The drop comes as traders brace for Friday’s US August data report. The first major macroeconomic release of September could determine how much the Federal Reserve cuts interest rates this month, according to Geoffrey Kendrick, global head of digital assets research at UK bank Standard Chartered.
While a 0.25% rate cut is a certainty this month, a softer payroll data may suggest that the US central bank could cut rates by 0.50%, which would “help digital assets find a base,” Kendrick told DL News.
The comments come as the Fed is set to meet on September 16–17, with investors bracing for the first rate cut in over a year. It has held its benchmark rate steady at 4.25% to 4.50% all year.
Lower rates are usually seen as bullish for cryptocurrencies as they incentivise investors to bet on risk-on assets.
In August, US Treasury Secretary Scott Bessent told Fox Business that the Fed should begin an easing cycle with a 0.50% cut next month.
Markets are pricing an 89.7% chance of a September cut, according to the CME FedWatch tool.
Similarly, Polymarket bettors give the Fed a 83% chance of slashing the rates by 0.25% in September and 4% chance of a 0.50% cut.
To be sure, not everyone is convinced that interest rates will and should be cut. In a note to investors on Saturday, Ed Yardeni of macro research firm Yardeni Research argued that the market doesn’t need a cut as inflation is closer to 3% year-over-year than the Fed’s 2%.
“Our subjective odds are 40% [that the fed will cut interest rates,]” Yardeni said.
Bitcoin’s pullback has been shaped by capital rotation into Ethereum, and historical price action around the crypto’s halving cycle, Kendrick said.
While traders may hope for an interest rate cut, investors aren’t betting that Bitcoin will reclaim the all-time high price of $124,000 any time soon.
That’s according to data from Deribit, an options-trading platform, where a big number of puts are in the $95,000 to $110,000 range. Puts are bearish bets.
The overall crypto market is down almost 5% over the past seven days, according to CoinGecko.
Market and macro jitters
The weakness in crypto comes amid a broader pullback in US equities markets.
The Nasdaq fell 1.2% on Friday, while the Philadelphia Semiconductor index posted its worst week since April. The S&P 500 fell 0.6%, its sharpest one-day drop this month.
Nvidia, the $4 trillion AI giant, slid over 3% last week as export-control concerns clouded its long-term China sales strategy.
Crypto market movers
- Bitcoin is up 0.2% over the past 24 hours to trade at $108,594.
- Ethereum is down 1.8% to trade at $4,389.
What we’re reading
- How the fight over UK crypto regulations is heating up — DL News
- Citigroup Explores Stablecoin and Crypto ETF Custody Services — Unchained
- What Will Remain After the AI and Crypto Bubbles? — Project Syndicate
- Can PumpFun Be Dethroned? — Milk Road
- Stablecoin market on track to hit $1.2tn after Coinbase maps 20,000 ways to get there — DL News
Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email at lance@dlnews.com.
