Macro & Crypto Market Overview
Major cryptocurrencies Bitcoin $BTC
(BTC) and Ether (ETH) kicked off August with heightened volatility, pressured by a stronger U.S. dollar and looming risk-off sentiment. The U.S. Dollar Index (DXY) climbed past the critical threshold of 100—its highest level since late May—on renewed tariff-driven inflation concerns, triggering caution in risk asset markets.
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🔍 Price Action Snapshot
Bitcoin slipped to around $114,290, briefly testing a bullish trendline stemming from April and June lows, before rebounding near the $115,900 zone.
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Ether followed a similar path, dipping toward $3,616 before recovering and trading in the $3,690 range.
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⚠️ Dollar & Tariff Dynamics
The U.S. administration’s reintroduction of sweeping global tariffs—10% for countries with a trade surplus and 15% for others—has reignited inflation concerns. Core PCE, a Fed-preferred inflation gauge, surged to 2.8% YoY in June, staying at a cycle-high pace. Higher inflation estimates are tempering market expectations for near-term Fed rate cuts. According to CME FedWatch, the odds of a September rate cut have shrunk to just ~41%, down from ~58% a week ago.
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📉 Yen Weakness and Global Risk Sentiment
Japan’s currency weakened sharply, falling beyond ¥150.50/USD, marking its lowest level in four months. This comes after comments from the Bank of Japan suggesting caution on raising rates prematurely. The FX market’s heightened sensitivity ahead of U.S. jobs data added to the downward pressure on JPY and overall risk appetite.
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📊 Focus On NFP: A Pivotal Catalyst
Traders are now awaiting the U.S. nonfarm payrolls report, viewed as a key signal for Fed direction. A weaker-than-expected labor print could reinforce expectations for a policy pivot—likely delivering a tailwind for crypto. As Matt Mena of 21Shares notes: "If labor data confirms a cooling economy and the Fed pivots, BTC could continue its grind higher, with $150K and $200K still in play this cycle."
