Cryptocurrencies are experiencing a downturn as the dollar strengthens and bond yields continue to rise. The dollar gained strength and yields surged as the market processed the Fed’s latest rate cut and forward guidance, which turned out to be less dovish than expected by some traders. The monetary policy decisions from the Bank of Japan, along with unexpectedly robust labor market data, influenced market sentiment.
The Federal Reserve on Wednesday reduced rates by 25 basis points, as anticipated. The Fed indicated the possibility of two additional quarter-percentage rate cuts in 2025. Thursday’s report indicated a decrease in initial jobless claims by 33 thousand from the prior week, bringing the total to 231 thousand for the second week of September. This data influenced expectations regarding Fed rate cuts and subsequently affected market sentiment. Markets had anticipated a significantly higher figure of 240 thousand. The Bank of Japan maintained its interest rates on Friday, aligning with expectations. Nonetheless, it signaled intentions to begin liquidating its positions in ETFs and REITs, which could influence market sentiment regarding risk assets. The six-currency Dollar Index, which assesses the Dollar’s strength against a selection of six currencies, stands at 97.52, reflecting overnight gains of 0.17 percent. The index saw an increase of 0.49 percent on Thursday and 0.25 percent on Wednesday.
Sovereign bond yields increased across various regions and maturities. Ten-year bond yields rose by over half a percent across various countries, including the U.S., Germany, France, Italy, Japan, and Hong Kong. In the U.S., yields on the 5-year and 30-year tenors surged by nearly half a percent. Reports indicate that Bitcoin put options, which serve as a hedge against price declines, are currently trading at a premium compared to Bitcoin call options, which are bets on price increases. This trend highlights the prevailing weak market sentiment. In a climate of profit-taking, the total market capitalization of cryptocurrencies has seen a decline of 0.53 percent over the last 24 hours, now standing at $4.08 trillion. In the last 24 hours, 10 out of the top 100 cryptocurrencies have seen gains exceeding one percent, while 45 have experienced declines greater than one percent. Eight of the top 10 non-stablecoin cryptocurrencies are experiencing declines overnight. TRON, holding the 9th position overall, is the top cryptocurrency to experience overnight trading gains. Bitcoin is currently priced at $116,881.96, reflecting a slight overnight decline of 0.26 percent. BTC fluctuated between $117,911.79 and $116,695.89 over the last 24 hours. The digital asset is presently valued approximately 6 percent lower than its peak of $124,457.12 reached on August 14.
Ethereum also slipped 1.2 percent overnight, trading at 4,537.22. Ether is currently trading at a price that is 8 percent lower than its peak value. The trading range over the past 24 hours fluctuated from $4,636.98 to $4,521.28. On Thursday, Bitcoin-based Spot ETF products in the U.S. saw inflows totaling $163 million, contrasting with outflows of $51 million the previous day. On Thursday, Ethereum-based Spot ETF products saw net inflows of $213 million, a notable increase compared to the net outflows of $2 million recorded on Wednesday. 5th ranked BNB slipped by 0.06 percent overnight, now trading at $996.60. The value of Solana, currently in 6th place, fell by 1.2 percent overnight, now sitting at $243.29. The 8th ranked Dogecoin saw a decline of 1.9 percent overnight and is now trading at $0.2750. TRON, holding the 9th position overall, saw an increase of 0.60 percent overnight and is now priced at $0.3472.
Cardano, currently in the 10th position, experienced a decline of 1.1 percent overnight, now trading at $0.9066. 80th ranked Aster topped overnight gains among the top 100 cryptocurrencies with a gain of more than 36 percent. 64th ranked Immutable surged 13.6 percent, followed by 34th ranked NEAR Protocol that gained 12 percent. 49th ranked MYX Finance experienced the most significant overnight losses among the top 100 cryptocurrencies, with a decline exceeding 25 percent. 48th ranked Pump.fun also erased more than 10 percent in the past 24 hours.