The general sentiment in the cryptocurrency market appears to be turning bearish as Bitcoin and Ethereum posted losses during today’s trading session. The two largest cryptocurrencies by market capitalization are still posting some gains on higher time frames, but they seem to be preparing for a shady week.
At the time of writing, Bitcoin (BTC) is trading at $22,100 with a 3% loss in the last 24 hours. Meanwhile, Ethereum (ETH) is trading at $1,520 with a loss of 6% over the same period.
The cryptocurrency market is facing some hurdles with this week’s public corporate earnings reports. If public companies fail to meet market expectations, risky assets may resume their downtrend.
Jurrien Timmer, Macro director of investment firm Fidelity, thinks this earnings season has been “boring.” So far, only 104 companies in the US public market have released their reports with Meta, Apple and other major entities still waiting to be followed up.
In addition, the Federal Reserve can announce a decision on raising interest rates. Most market participants are anticipating an increase of 50 basis points to 75 basis points, and anything higher with a weak earnings season could lead to negative volatility in crypto assets.
In the second week of this earnings season, Timmer He said Here is the graph shared below:
After all the hand-banging about the “next shoe to drop,” boring earnings season will be a relief. The second quarter so far appears to be exactly that, with 72% of companies beating (low) estimates by an average of 4.3%. Only 104 companies have reported so far, but it’s a good start.
Should Crypto Investors Prepare for the Worst?
More data Submitted By Timmer hints at an extension of July’s bullish price action for the S&P 500. This major index is down 16% since January 2022 and could head higher creating a “risk up” if “earnings growth” continues to hold.
In the past months, Bitcoin, Ethereum, and the cryptocurrency market have seen a positive rally after a major Federal Reserve event. On Wednesday, the financial institution will hold the Federal Open Market Committee (FOMC) meeting.
According to Timmer’s conclusions, if earnings remain “boring”, the cryptocurrency market is likely to push higher. However, the Fed may cut risky assets by 100 basis points.
Via Twitter, a pseudonymous analyst presents the case for the Fed’s hawkish bank on the back of “strong” data posted by the US job markets. Such data may hint to financial institutions that they can “keep paying until something breaks”. analyst He said:
As long as the market sees US job prospects flat, it will be on the alert for tougher changes in monetary policy (selling the rally). The Fed knows that breaking the labor market will help cool inflation. If people lose their jobs and do not have dollars to spend, the demand side pressures diminish and the supply side can return to normal.