Bitcoin and Ethereum’s Price Movements: Analyzing Recent Market Dynamics

Bitcoin and Ethereum Retreat as Investors Eye Fed Chair Powell’s Speech and U.S. Labor Data

Bitcoin and Ethereum both saw a decline in momentum following last week’s rally, with Bitcoin dropping 2.07% to $64,392 and Ether falling 1.69% to $2,624. Investors are now focusing on two key events: Fed Chair Jerome Powell’s speech on Monday and the upcoming non-farm payroll (NFP) data release on Friday, both of which could significantly impact market sentiment.

Bitcoin Loses Steam After Hitting a Two-Month High

Bitcoin surged close to $66,500 last Friday, reaching its highest level since late July, boosted by lower-than-expected U.S. Personal Consumption Expenditure (PCE) data and fresh stimulus measures from China. However, over the past 24 hours, Bitcoin has fallen 2.09% to hover around $64,403, according to The Block’s data.

Rachael Lucas, a crypto analyst at BTC Markets, noted that Bitcoin appears overbought on the daily chart. “Momentum has clearly faded after reaching a high of $66,498 on Friday,” she said.

Ethereum Also Struggling to Regain Momentum

Similar to Bitcoin, Ethereum has been facing challenges. After breaking through its 50-day Simple Moving Average (SMA) last week, the cryptocurrency failed to sustain its upward movement. According to The Block’s data, Ether is currently down 1.69% over the last 24 hours, trading at $2,626.

Lucas pointed out that Ethereum, like Bitcoin, has lost momentum. “Ether is also struggling to regain strength after last week’s bull run,” she said.

Fed Chair Powell’s Speech and Non-Farm Payroll Data on the Horizon

Investors are now eagerly anticipating Jerome Powell’s speech at the National Association for Business Economics later today, as well as Friday’s U.S. non-farm payroll report. These two events are expected to provide insights into the Federal Reserve’s monetary policy and the broader U.S. economic outlook.

“Powell’s comments, particularly on inflation and interest rates, often move markets, and crypto is no exception,” said Lucas. “Any hawkish tone could further fuel risk-off sentiment, contributing to today’s declines.”

However, Augustine Fan, Head of Insights at SOFA.org, downplayed the potential impact of Powell’s speech. “It’s unlikely that Powell will say anything new or market-moving, given the recent inflation data that favors his previous dovish stance.”

Non-Farm Payroll Report to Set the Tone for Crypto Markets

The U.S. Labor Department will publish its monthly non-farm payroll data on Friday, which is expected to offer a snapshot of the U.S. job market and overall economic strength. While August’s report showed a weakening labor market, markets are anticipating an improvement in September’s numbers.

“Stronger-than-expected employment data may reinforce the Fed’s current approach to interest rates, potentially benefiting risk-on assets like Bitcoin and Ethereum,” Lucas added.

Market Sentiment: Positive Outlook for Q4

Despite the recent pullback, the broader outlook for crypto remains positive. Fan noted that the macro environment continues to support higher crypto prices, especially with high correlations between crypto assets and traditional market indices like the S&P 500 (SPX).

“With a favorable macro backdrop, we expect crypto prices to remain bullish as we move into the fourth quarter,” Fan said. “Additionally, with Vice President Kamala Harris showing some degree of support for crypto in her campaign rhetoric, we remain optimistic that buy-the-dip strategies will become increasingly popular among investors.”

Cautious Optimism Ahead of Key Economic Events

As Bitcoin and Ethereum navigate a temporary pullback, all eyes are on the Federal Reserve and U.S. labor market data this week. While short-term volatility may persist, the long-term outlook remains positive, especially as institutional interest and favorable macroeconomic conditions continue to support the broader crypto market.

Bitcoin is currently trading at $64,400, down 2% over the last 24 hours.

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