Biggest Crypto Gainers Today on DEXTools – SP500, SALT, XD
Blue chip cryptocurrency prices are on the front foot on Wednesday as US yields and the US dollar fall and US equity prices rise on a raft of weaker-than-expected US survey data.
Bitcoin (BTC) recovered to trade in the $26,300s and Ether (ETH) to the upper $1,600s, both up in the region of 2% over the last 24 hours after flash US PMI Survey data for August showed the dominant US service sector stagnating, raising concerns that the US economy might not be quite as strong as data in recent weeks has suggested.
That has eased fears about more interest rate hikes from the US Federal Reserve later this year.
As per the CME’s Fed Watch Tool which monitors US interest rate futures market pricing, the implied probability of another 25-bps rate hike by the November meeting fell to under 40% on Wednesday from above 45% one day ago.
Crypto prices tend to perform well when markets are lowering their bets as to how high US interest rates will go, and vice versa.
While the recovery will be reassuring to the crypto bulls, traders need to not get carried away.
That’s because remarks from Fed Chair Jerome Powell later in the week could put a dampener on the rally.
The Fed Chair is speaking at an annual consortium of central bankers at Jackson Hole and is expected to 1) keep the door open to additional interest hikes and 2) push back against the idea of premature rate cuts given the battle against inflation in the US is still not won.
If markets interpret this message hawkishly, the US dollar and yields could once again rise, sending blue chip cryptos lower.
Until then, major cryptocurrencies are unlikely to explode too much higher.
Traders looking for quick gains will probably continue to flock to the illiquid shitcoin/meme coin markets, where
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