Little movement in cryptos after Fed and ECB; Bitcoin at $29,100
Little movement in the cryptocurrency market. Bitcoin (BTC) is retreating slightly, although it remains above $29,100, while Ethereum (ETH) is virtually flat and trying to hold $1,900.
"Bitcoin isn’t seeing the same amount of flows as it did early during all the banking drama with SVB. It is getting very ugly for financials and that should spell trouble for the broader economy," explained Edward Moya, senior markets analyst at Oanda, who also believes the reigning cryptocurrency is "anchored" at the current level "until it gets regulatory clarity".
Markets have priced in various stimulus during the week, such as the latest Federal Reserve (Fed) and European Central Bank (ECB) interest rate decisions or the latest developments around PacWest, which looks set to become the next casualty of a financial crisis for which there is no light at the end of the tunnel.
"Sticky inflation and a slowly cooling labor market will make it difficult for the Fed to cut rates anytime soon. Financial stability concerns are not going away anytime soon and that will continue to fuel calls that we are headed towards a recession that will be much more hard hitting than the mild one some are expecting," noted Moya.
Fears that China's economy is slowing have also dampened market sentiment. This past Thursday, the Caixin PMI showed a decline to 49.5 points in April, marking the first contraction in manufacturing activity since January due to a slump in the real estate sector and global slowdown fears.
"Previous recoveries in China boosted other economies. In 2009 and 2016, for example, generous stimulus aimed at infrastructure development helped revive international trade because it boosted demand for capital goods and raw materials. However, this time the Chinese recovery will not have such an impact on the rest of the world," Aegon AM explained.
On the other hand, today, on Friday, the market will value the official employment data from the United States. The ADP report surprised notably to the upside, although the consensus does not expect the official reading to rebound so sharply.
Moya believes the U.S. labor market is softening, although not "quickly enough" to justify rate cuts by the Fed. "Sticky US inflation should keep the Fed on hold until year end, but that could change quickly if banking contagion extends beyond the regionals," the expert added.
On the crypto side, Israeli authorities have seized around 190 Binance accounts with alleged links to terrorist groups such as Hamas and Daesh since 2021, as reported by Reuters. On the other hand, the token meme Pepe coin (PEPE) continues to soar after rising 500% in two weeks and surpassing $900 million in total capitalization. Numerous analysts continue to warn that this cryptocurrency could be subject to a pump and dump movement, as has already happened with hundreds of projects with similar characteristics, and they stress that its collapse is imminent.
In the rest of the market, there have been slight falls among the main altcoins. The drop of more than 1% in the last 24 hours in Solana (SOL) and the slight rebound in Ripple (XRP) stand out.