The cryptocurrency market showcases volatility as it reacts to expectations of significant economic information from the U.S.
Reasons for Caution in the Crypto Market
Investors are waiting for significant employment figures due to be released on July 3 and July 4. These figures, including unemployment claims and non-farm payroll data, may influence the decisions of the Federal Reserve. While Bitcoin has dropped by 1%, landing at $105,200, Ethereum saw a 2.5% decrease to $2,400. Vincent Liu from Kronos Research commented on the situation, noting the low market liquidity, indicating it is more of a wait-and-see scenario.
Impact of U.S. Legislation on Risk Assets
Nick Ruck highlighted potential ramifications from a new Senate spending bill associated with former President Trump. The bill, which anticipates significant tax cuts and reductions in healthcare programs, could widen the fiscal shortfall and heighten market strain. Federal Reserve Chairman Jerome Powell reaffirmed at a global banking forum that monetary policy decisions will depend on data released, though specific timelines for potential changes were not provided.
Current Market Overview
Peter Chung from Presto Research observes that early liquidity markers indicate slight improvement; however, the current market downturn is lagging behind the depth seen in traditional finance sectors. Market liquidity remains under pressure as investors feel uneasy about the Senate’s legislative package. It is noteworthy that every 1% shift in Bitcoin affects stock market volatility by approximately 0.2%.
Despite uncertainties, stakeholders in the cryptocurrency market maintain focus on macroeconomic signals and legislative actions that may reshape the current landscape.
