Bitcoin, ether weaken ahead of Powell’s speech, non-farm payroll data this week

Bitcoin BTC -1.85% and ether retraced some of their gains on Monday morning in Asia, as the market looks ahead to U.S. Federal Reserve Chair Jerome Powell’s upcoming speech as well as the release of the country’s labor market data expected Friday.

The price of bitcoin fell 2.09% in the past 24 hours to around $64,403, according to The Block’s bitcoin price page . The world’s largest cryptocurrency reached nearly $66,500 last Friday, its highest level since the end of July, following the release of lower-than-expected personal consumption expenditure (PCE) data. China also announced a strong raft of stimulus measures to reinvigorate its economy. 

“Bitcoin appears overbought on the daily chart, with its price rolling over after reaching a high of $66,498 on Friday,” said Rachael Lucas, crypto analyst at BTC Markets. “Since [last week], momentum has faded.”

Ethereum ETH -1.48% is similarly struggling to regain strength, Lucas said, as it lost momentum after breaking its 50-day simple moving average last week. Ether traded down 1.69% over the last 24 hours at $2,626, The Block’s ether price page showed.

Powell speech and NFP

Meanwhile, Investors are looking toward two key macroeconomic events this week — Fed chair Powell’s speech at the National Association for Business Economics later today and the U.S. non-farm payrolls report on Friday.

Powell is expected to address the economic outlook and possibly provide insights into the Fed's monetary policy. “Powell’s comments, particularly on inflation and interest rates, often move markets, and crypto is no exception,” Lucas said. “Any hawkish tone could further fuel risk-off sentiment, contributing to today’s declines.”

However, SOFA.org Head of Insights Augustine Fan said that it is not likely that Powell will say anything that is market moving. “Investors are likely expecting him to speak more of the same as per the last FOMC, especially with the recent inflation data moving in his favor since his last dovish Q&A.”

The U.S. Labor Department will publish its monthly non-farm payrolls report this Friday, which offers a snapshot of the nation's job market and overall economic strength. While August’s data showed a weakening U.S. labor market, BTC Markets’ Lucas said markets expect improvement in the September data. “Stronger-than-expected employment data may reinforce the Fed’s current approach to interest rates, potentially benefiting risk-on assets, including Bitcoin and Ethereum,” Lucas said.

In terms of crypto prices, Fan told The Block that the market will likely stay bullish in the near-term. “With crypto correlations staying high to macro assets, particularly against the SPX, we consider the friendly macro background to remain a strong tailwind for crypto prices into the fourth quarter,” Fan said.  “Furthermore, with the Kamala camp playing lip service to crypto 'support' as part of her campaign rhetoric, we remain bullish on price action in the near term, with targeted put-selling strategies likely to be popular as investors switch into a 'buy-the-dip' mode.”