Communications

All eyes are on the Fed today, as a decision on the first rate cut in four years is expected. Analysts are divided on whether the cut will be a quarter or half a point, making this decision and its impact on the markets particularly interesting.

Bitcoin continued to trade as a risk asset over the past week, dragged down by tech stocks before slightly rebounding alongside them at the start of the week.

Last week, we mentioned that Nvidia’s financial results were highly anticipated, as they now have a significant impact on the direction of the markets and the interest in risk assets versus more fundamental values. Despite excellent results, the stock has been sharply declining since then. Nvidia notably fell by 9.5% on Tuesday, wiping nearly $300 billion off the chipmaker’s market capitalization and dragging other semiconductor stocks down with it. Such a decline signals a current shift away from risk assets, including Bitcoin.

The price of Bitcoin rose on Friday after Federal Reserve Chairman Jerome Powell announced that an interest rate cut was imminent. Powell emphasized that inflation was decreasing and that the Fed was becoming more attentive to the growing weakness in the labor market. Bitcoin continued its rebound over the weekend but lost that gain at the beginning of the week.

It was a quiet week in the cryptocurrency market, with Bitcoin continuing to trade within an increasingly narrow consolidation channel. Bitcoin briefly surpassed $61,000 during early European trading hours on Monday, despite volatility remaining high, reaching a yearly peak of 3.25% on August 10. Currently, volatility is at 3.07%.

Although the cryptocurrency market experienced a broad sell-off on Monday, August 5th, investors saw this price weakness as a buying opportunity, as evidenced by the influx of $176 million into digital asset investment products last week. Indeed, the week was one of strong rebounds, with the price now flirting again with the $61,000 mark.

Bitcoin recently experienced a sharp 30% drop in one week, reminiscent of the March 2020 crash when markets fell due to the discovery of Covid. After plunging to just over $49,000, Bitcoin’s price has been rebounding. At the time of writing, the price is slightly above $57,000.

It was a remarkable rebound week for Bitcoin, with the price clearly surpassing the important 200-day moving average. Last week, Bitcoin-related exchange-traded funds (ETFs) recorded gains of $1.35 billion, marking the fifth-best week ever for BTC-focused funds.