The crypto markets continued to chop this week, with majors slowly grinding upwards amidst a handful of sharp pullbacks in the week. Bitcoin (BTC) traded fell to $56K last Friday, but quickly recovered over the week, achieving a weekly high of $61.5K and ending the week up 4.71%. While Ethereum (ETH) followed a similar pattern, its recovery was much weaker, climbing only around 4% from its weekly low of $2,538.66, to end the week up 1.99% from the week prior.
With the muted price action, liquidations continued to dwindle, with daily liquidations even falling under $100M for several days in the week. Funding rates climbed slightly this week, with BTC funding in the low negative range while ETH climbed into the low positive range, perhaps a sign of increasing risk appetite.
Why does it matter?
The market continues to trade sideways amidst the slow release of economic data. This week, jobless claims were revised higher to 232,000 from the initial 227,000, potentially signaling a weaker labor market. Following the release of minutes from the July Fed meeting, "the vast majority" of officials "observed that, if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting."
All eyes remain on the upcoming September rate cuts. Markets expect the cut to be 25 basis points, with the possibility of a 50 basis points rate cut only if there is further pronounced weakening of the economy.
The expectation of the upcoming rate cut could be the catalyst for the crypto markets to continue climbing upwards, although its move is still relatively weak when compared with its traditional finance counterparts. Both the S&P500 and the Nasdaq are nearing all-time highs. Meanwhile, Gold broke new all-time highs, reaching $2,531.60 per ounce.
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