5 min readAfter solid gains last week, Bitcoin fell at the start of this week and is testing support at around the 63,000 level.
Bitcoin rallied hard last week, gaining 6% on Friday alone, after Federal Reserve chair Jerome Powell signaled that the Fed is ready to adjust interest rates. The market is pricing in a 100% chance that the Fed will cut interest rates at the September meeting, although the size of the rate cut is less clear.
The market pricing in a 28.5% probability of a 50 basis point rate cut against the 71.5% probability of a 25 basis point rate reduction. A low interest rate environment increases liquidity, which benefits riskier assets such as stocks and Bitcoin.
Highlighting this point yesterday, the Dow Jones industrial average rose to a record high of 41,427; however, the S&P 500 and the Nasdaq 100 were pulled lower by a weaker tech sector, in signs of nerves ahead of Nvidia’s earnings tomorrow.
This week, Friday’s US core PCE inflation figures, which are the Fed’s preferred gauge for inflation, could help provide further signals about the size of the Fed’s rate cut.
Geopolitical risks limit gains
Gains are being limited by a fragile geopolitical situation worldwide. Risk sentiment is struggling with a slew of geopolitical risks.
Following in the footsteps of the US and the European Union, Canada said it would impose 100% tariffs on imports of Chinese EVs and 25% tariffs on Chinese steel. The moves raise concerns about a trade war between China and the West.
Meanwhile, a ceasefire in Israel—Gaza is showing little signs of materialising. Oil prices spiked after the markets were spooked by a row in Libya over the central bank’s leadership, resulting in halting oil production in the country.
Looking ahead to the economic calendar is relatively quiet today with just US home sales and consumer confidence data due.
The correction in Bitcoin is impacting several other altcoins. TON, UNI, and LINK, among others, moved lower and lost more than 4% today.
TON drops as CEO Durov is arrested
TON coin has fallen to $5.08, marking a 35% decline since June and a 19% decline across August. TON dropped 7% in the past 24 hours after Telegram CEO Pavel Durov was arrested in France on money laundering charges and not cooperating with authorities. However, these charges are so far unsubstantiated, and the investigation is ongoing.
As the legal process continues, the future of TON coin and The Open Network darkens. Telegram has 900 million users, and TON’s success is closely tied to its integration with the Telegram platform.
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