Lucía Peña
Bitcoin and Ether saw a pullback on Monday in Asian trading, as investors awaited key U.S. economic updates, including a speech by Federal Reserve Chair Jerome Powell and the upcoming labor market data set for release on Friday.
Bitcoin’s price dropped by 3% over the last 24 hours, settling around $63,600, based on data from PRIME X. Last Friday, Bitcoin surged to nearly $66,500—its highest point since late July—following the release of lower-than-expected personal consumption expenditure (PCE) data, alongside a significant economic stimulus package announced by China.
“Bitcoin looks overbought on the daily chart, with the price rolling back after hitting $66,498 last Friday,” said Rachael Lucas, a crypto analyst at BTC Markets. “Momentum has been fading since then.”
Ethereum faced similar challenges. Lucas mentioned that after breaking its 50-day simple moving average last week, Ether has struggled to maintain its upward momentum. Over the past 24 hours, Ether dropped by 2%, trading at $2,600.
Focus on Powell’s Speech and Labor Data
This week, the market’s attention is focused on two critical macroeconomic events: Jerome Powell’s speech at the National Association for Business Economics today and the U.S. non-farm payrolls (NFP) report due on Friday.
Powell is expected to address the broader economic outlook, which could provide further clues about the Federal Reserve’s monetary policy direction. “Powell’s remarks, particularly regarding inflation and interest rates, often influence market movements, including crypto. Any signs of a hawkish stance could amplify today’s decline in risk assets,” Lucas noted.
However, Augustine Fan, Head of Insights at SOFA.org, suggested that Powell is unlikely to introduce any new market-shifting insights. “Investors probably anticipate him to echo the same points made during the last FOMC meeting, especially given that recent inflation data aligns with his more dovish stance,” Fan said.
On Friday, the U.S. Labor Department will release the latest non-farm payrolls data, offering a snapshot of the employment landscape and the broader economy’s health. Despite August’s weaker labor market figures, Lucas said that the market expects an improvement in the September report. “Stronger employment numbers may validate the Fed’s current approach to interest rates, potentially benefiting risk-on assets like Bitcoin and Ethereum,” she added.
Market Outlook
Despite the current price retracement, Fan remains optimistic about the near-term market for cryptocurrencies. He emphasized that digital asset prices remain closely correlated with broader macroeconomic trends, particularly U.S. equities like the S&P 500. “With favorable macro conditions continuing into Q4, crypto prices are likely to benefit,” Fan told PRIME X.
Additionally, Fan pointed out that the political landscape might also play a role in supporting crypto markets. “Given the Kamala administration’s recent supportive rhetoric toward crypto as part of its campaign strategy, we remain bullish for the near term. Investors are likely to adopt ‘buy-the-dip’ strategies, with put-selling becoming a popular approach as confidence in the market builds,” Fan concluded.
