Bitcoin Slides as Rate-Cut Hopes Fade: Crypto Daybook Americas
The cryptocurrency market experienced a downturn, with Bitcoin (BTC) falling below $115,000 and the broader CoinDesk 20 (CD20) index dropping 6%. Ether (ETH) and XRP also saw significant declines. This coincided with the implementation of new tariffs by President Trump, impacting imports from various countries. These tariffs negatively affected Asian equity markets and strengthened the U.S. dollar, pushing the dollar index above 100 for the first time since May. Consequently, hopes for a September interest rate cut diminished, as inflation, measured by the core PCE, rose to 2.8% year-over-year. Market sentiment shifted, with Polymarket and CME’s FedWatch tool reflecting a reduced probability of a rate cut.
The upcoming nonfarm payrolls data is crucial. Options traders are already hedging against further cryptocurrency declines, with increased short-term bearish positioning on BTC. However, ETH options show a more balanced or even bullish outlook. A stronger dollar and higher interest rates could favor yield-bearing stablecoins or ETH-based vaults, particularly in light of the GENIUS Act.
Several notable events are scheduled: Helium Network’s halving event, Hong Kong’s Stablecoins Ordinance taking effect, and the launch of BTCD, a bitcoin-backed stablecoin. Solana Mobile will begin shipping its Seeker Web3 device, and FTX will distribute funds to eligible claimants. Coinbase Derivatives will launch new futures contracts.
Macroeconomic data releases include July employment data, manufacturing and services data for Brazil, Canada, and the U.S., as well as U.S. consumer sentiment data. Further tariffs are scheduled to take effect on August 6th and 7th. Several cryptocurrency companies are set to release earnings reports.
The NFT market is recovering, with CryptoPunks hitting a three-year high. Open interest in CME bitcoin and ether futures has declined, potentially due to institutions favoring spot ETFs or traders reducing exposure. However, open interest remains elevated in offshore perpetual futures. Deribit data reveals a shift in sentiment against ether, with higher downside insurance premiums compared to bitcoin. The total amount of USDT transferred on-chain reached its highest point since early 2022, indicating increased stablecoin activity.
