Bearish sentiment dominated early Aug. 29 as most cryptocurrencies recorded losses. bitcoin (BTC) plunged below $110,000 for the second time in three days, falling to $109,436 after peaking around $113,400 less than 24 hours earlier, according to Bitstamp data. The top crypto has since reversed some of the losses and was trading around $110,000 at the time of writing.
Ethereum ( ETH), which only reached its all-time high of $4,955 on Aug. 24, tumbled by just over 5% to $4,340. The plunge came even as experts continue to project a new ATH in the coming weeks. Tom Lee, chairman of Bitmine Immersion Technologies, has predicted that ETH will likely close the year trading between $10,000 and $12,000.
XRP, the number three digital asset by market capitalization, also saw losses, tumbling by 4.2% to $2.88. Since peaking at $3.14 on Aug. 14, XRP has struggled to break past the $3.10 level and has now traded below $2.90 for the second time this week. Other altcoins similarly saw declines, including HYPE, which was the most down among the top 20 digital assets tracked by Coingecko, declining by 8.1% in 24 hours. DOGE went down by 4.1% while ADA and SUI dropped by 5% and 5.5% respectively.
Most altcoins saw losses of 2% to 5%, as markets reacted to initial reports that the U.S. July core Personal Consumption Expenditures (PCE) index had risen marginally. A marginal increase in the core monthly PCE index, if confirmed, would be the third consecutive monthly rise, an outcome that would ordinarily give the U.S. Federal Reserve a pretext to hold off on cutting interest rates.
However, Federal Reserve Chairman Jerome Powell’s recent speech at Jackson Hole, downplaying inflation concerns, has fueled hope among investors that the Federal Open Market Committee (FOMC) may vote to cut rates in September after all.
Some analysts believe that if the July core PCE is hotter than expected, the Federal Reserve would be less inclined to continuously cut rates. In its latest recommendation, Bitunix Analyst said that if the data comes in at or below expectations, risk sentiment can hold. However, if it’s significantly hotter, the Federal Reserve’s forward guidance may shift toward a “one-and-wait” stance.
The recommendation urged investors to focus on core services and wage trends, alongside U.S. Treasury yields and the DXY as key drivers of risk appetite. For BTC traders, the Bitunix team stated:
“For BTC, watch whether $114.5K flips into support, or if a retest of $107.6K support confirms market resilience.”
After the July core PCE report landed, showing a 2.9% jump in core inflation for the month, markets inched higher. Even with inflationary pressures lingering, July’s core PCE figure wasn’t strong enough to shake expectations for a Federal Reserve rate cut in September.
At press time at 9:20 a.m. Eastern time, BTC is exchanging hands for $110,484 per unit.
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