Simply put
- Bitcoin remained around $108,000, while Ethereum traded near $3,750, leading to some caution as the U.S. jobs report looms on Friday.
- Bessent mentioned that high interest rates “may have pushed” aspects of the economy towards recession, stirring discussions about whether future rate cuts would indicate strength or weakness.
- On-chain data pointed to Bitcoin being below a crucial cost level of $113,000.
Cryptocurrencies dipped on Sunday as traders prepared for the upcoming U.S. jobs data and reflected on Treasury Secretary Scott Bessent’s remarks about the tightening interest rates affecting parts of the economy.
Over the last 24 hours, Bitcoin fell by about 1.7%, trading at roughly $108,000, while Ethereum saw a drop of around 3.5%, nearing $3,750, according to CoinGecko.
As investors took a defensive stance, major tokens struggled, and altcoins did not perform well.
In a recent interview on CNN airing over the weekend, Bessent stated that the Fed’s restrictive measures “may have pushed parts of the economy, particularly housing, into recession,” suggesting there’s potential for the central bank to cut interest rates.
He cautioned that if borrowing costs keep rising, financial strains could worsen, especially for those with leveraged household debts.
Initially, the crypto market seemed to welcome Bessent’s comments as supportive for easing measures, but enthusiasm waned as traders considered that a rate cut driven by slow activity could lead to short-term volatility instead of a straightforward liquidity boost.
Bitcoin’s dominance is still strong, reflecting a cautious approach towards smaller-cap tokens.
As U.S. markets prepare to reopen tomorrow, attention turns to the jobs report set for release at 8:30 a.m. ET on Friday. Economists expect the unemployment rate to hold steady, but hiring could show signs of slowing.
This data will be pivotal in understanding whether potential rate reductions indicate a confident soft landing or growing worries about economic weaknesses.
In the meantime, on-chain metrics reveal diminishing momentum. Bitcoin hasn’t managed to rise above the short-term holder cost mark of around $113,000, a threshold seen by some analysts as a dividing line between a bullish phase and a downturn.
After maintaining a position above this level for six months, it’s been holding prices down for three weeks, hinting at a decline in demand. Glassnode highlighted this in a recent report.
Analysts at Glassnode suggest that if the downward trend continues, the risk of further declines increases, with the next significant support level around $88,000. This is based on the realized cost of actively circulating supply and is a point that has historically marked major adjustment phases in prior cycles.
