The crypto markets saw largely muted movements this week, despite the release of several key pieces of economic data, including Core PPI and CPI, unemployment claims and retail sales. Bitcoin (BTC) traded within a $4,000 range between $58K and $62K, while Ethereum (ETH) traded in a $200 range between $2,550 and $2,750. The week ended with both BTC and ETH positive at 0.34% and 3.30% up respectively.
In line with price action, liquidations also remained muted, with daily liquidations around $100-200M. Funding rates have also remained largely untouched, with BTC funding in the negative range while ETH stays in the low positive range.
Why does it matter?
After a bloodbath the week prior, the market manages to hold on, even recovering some of its lost value over this week. U.S. economic data from August 15 indicates a robust economy, easing recession fears. Weekly jobless claims dropped to 227,000, highlighting a stable labor market, while retail sales jumped by 1.0% in July, the largest increase in 18 months, thanks to strong consumer spending. Despite a 0.3% decline in manufacturing due to temporary disruptions, the outlook remains positive. These signs of strength and slowing inflation suggest a likely ‘soft landing’ and the Federal Reserve might start a rate-cutting cycle without risking a recession.
Despite seemingly positive economic data on the CPI and PPI, crypto markets showed little strength, diverging from traditional equities markets. SPX, which tracks the S&P 500, experienced a V-shaped recovery and is 2.3% off its highs, and Gold is just 1.16% off its all-time high price. However, Bitcoin remains 21.4% from the highs of $73,750 reached in March. This could be due to the lack of risk appetite left in the crypto markets after many market participants were wiped out by the past five months of market weakness.
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