Crypto markets are in deep red on Monday, with industry leader bitcoin falling ahead of a week packed with economic data.
At press time, bitcoin traded near $68,200, down almost 3% in 24 hours, with XRP ether , recording much greater losses. Losses hit 85 of the top 100 tokens by market cap, with privacy coins like monero and zcash They fell 10% and 8%, respectively.
Smart contract tokens also bled, with CoinDesk’s smart contract platform select limited index falling nearly 6%, bringing its year-to-date decline to 28%.
The market weakness appears particularly disappointing against the backdrop of weak US consumer price index data released last week that kept hopes alive for rate cuts by the Federal Reserve.
CPI growth slowed to 2.4% year-on-year in January from 2.7% in December, official data showed, reinforcing expectations of at least two 25 basis point rate cuts by the Federal Reserve this year. This caused the 10-year US Treasury yield to fall to 4.05%, the lowest level since early December. Bitcoin recovered, rising from nearly $66,800 on Friday to over $70,000 over the weekend, but failed to establish a foothold there.
Vikram Subburaj, chief executive of India-based regulated exchange Giottus, said selective demand is the reason protests are struggling to sustain.
“Risk appetite remained selective and macroeconomic crosscurrents kept traders on the defensive. In derivatives, the market continues to behave as if it were ‘deleveraging first and asking questions later’. Rallies have struggled to sustain and dips are only selectively being bought near obvious levels,” he said in an email to CoinDesk.
Weak heavy macro
A week full of macroeconomic data lies ahead, and traders are watching the minutes of the Federal Reserve’s January meeting and the release of the Fed’s preferred inflation indicator, the personal consumption expenditures (PCE) price index, for new positioning signals.
“PCE inflation, the Fed’s preferred measure, will be closely monitored to confirm that price pressures are moderating, particularly after the CPI showed only gradual disinflation and inflation remains above the 2% target,” Dessislava Laneva, a Nexo dispatch analyst, said in an email.
“Markets will evaluate both monthly momentum and year-over-year trend for implications for the policy trajectory.” —Laneva added.
In traditional markets, Jupiter Asset Management’s Mark Nash, a prominent yen bear, has turned bullish, forecasting an 8-9% yen appreciation, particularly against the Swiss franc.
The yen and bitcoin have reached a record positive correlation in recent months, making any strength in the yen a key catalyst for bitcoin bulls.
