Bitcoin, the flagship cryptocurrency, has witnessed a 5% decline as the Asian trading week kicks off, with nearly every constituent in the CoinDesk 20 (CD20) index posting greater losses. Ether (ETH) has plummeted by 5.8%, Solana (SOL) by 7.8%, and XRP by 7%. Data from CoinGlass indicates that there has been $175 million in long liquidations over the last 24 hours.

Over the past week, BTC has seen a 13% drop, echoing the market downturn experienced post-FTX collapse.

Economic Indicators and Federal Reserve Projections

Stronger-than-anticipated U.S. jobs data, coupled with a rising unemployment rate, has led to speculation about a potential Federal Reserve rate cut in September, as noted in a recent report by ING. James Knightley of ING pointed out that private sector job growth has been notably sluggish, with only 136,000 new positions created in June, falling short of the 160,000 anticipated. Government, education, and healthcare sectors accounted for nearly 60% of the new jobs, whereas retail, temporary help, professional business services, and manufacturing sectors experienced job losses.

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Federal Reserve Rate Cut Predictions

Citi Research has made a more assertive prediction, suggesting in a recent note that it anticipates eight Federal Reserve rate cuts from September 2024 through July 2025, reducing the benchmark rate by 200 basis points to a range of 3.25%-3.5%.

On Polymarket, bettors are wagering on the likelihood of the Fed implementing 1-2 rate cuts by the year’s end, with a 34% probability of one cut and a 37% chance of two cuts.

Global Market Sentiments

The dovish expectations surrounding the Federal Reserve have failed to buoy Asian stocks, largely due to the European Union’s decision to impose steep tariffs on Chinese electric vehicle imports, which dampened market sentiment. Additionally, in France, leftist candidates secured more seats than the far-right but did not achieve a majority, resulting in a potentially hung parliament. This scenario poses a risk of political and policy stalemate, fostering potential risk aversion in European markets.