Last week’s job data revision showed a loss of 800,000 jobs. The reported figures had the Fed on alert. They don’t want the job market to collapse, and this data makes it even more likely they will cut rates sooner rather than later.
Crypto and equity markets are taking a hit, but let’s not lose our heads. Any dip we’re seeing now is temporary. Why? Jerome Powell said it’s time for the Federal Reserve to pump the brakes on interest rates.
Movement in crypto and stock markets
Powell’s comments are big news for money markets. Lower interest rates mean more money flowing, and that cash has to go somewhere—likely into stocks and crypto.
We’re talking about a 50-basis point cut, maybe even at the next meeting in September. The market is still betting on four rate cuts in 2024, even though there are only three meetings left. So yeah, the Fed might go all out.
U.S. equities have been strong, inching closer to their all-time highs. But hold on a second. Not everyone is convinced. Trading volumes are down, and today’s NVIDIA (NVDA) earnings report is making some folks nervous.
Options on NVDA are betting on a big move—up to 10%. This volatility could signal a peak for U.S. equities, at least in the short term.
But remember, even if we see a drop, it won’t last long. After the first rate cut, expect more liquidity to flood the market, pushing risk assets like stocks and crypto higher.
Now on-chain data from Glassnode shows a big drop in the number of Bitcoins held by over-the-counter (OTC) desks. Over 1,000 BTC—worth more than $60 million—have moved out since August 27.
Historically, these kinds of drops in OTC Bitcoin balances line up with price drops in BTC. But that’s not all. Whales are making moves.
Expect whales to take profits
Whale Alert reported a massive transfer: 2,300 BTC, worth about $141.81 million, moved to the Kraken exchange just before the recent price drop.
And according to Arkham Intelligence, this whale still holds a whopping 18,141 BTC, around $1.07 billion. If this whale decides to sell, and demand isn’t strong enough on the other side, we could see more pressure on Bitcoin prices. It’s a risk, no doubt about it.
But look, big transfers to exchanges often mean traders are looking to take profits. And why wouldn’t they? Bitcoin bounced back from lows around $49,575 in early August to as high as $65,100.
That’s a solid gain, and some big players are cashing in. This profit-taking is another reason we’re seeing some short-term dips. But again, these are normal market movements.
