Cryptos Rise As Recession Fears Fade

Cryptocurrencies increased more than 1 percent in the past 24 hours amidst data that revealed the strength of the U.S. economy. The data helped overcome hawkish hints from central banks a day earlier that warned of further rate hikes.

Data released by the U.S. Bureau of Economic Analysis showed the US economy grew by an annualized 2 percent on quarter in the first quarter of 2023, versus 1.3 percent in the second estimate, and forecasts of 1.4 percent.

Data released by the U.S. Department of Labor showed initial jobless claims in the U.S. at 239 thousand for the week ended June 24 versus 264 thousand a week earlier. Markets were expecting a reading of 265 thousand. The sharply lower-than-expected reading reinforced the strength of the job market.

Both the GDP data and the labor market data pointed to further headroom available for the Fed to raise rates further. Recent central bank commentary from the European Central Bankers Forum had heightened rate hike anxieties.

The CME FedWatch tool which reflects rate hike expectations in the market, surged to 89.3 percent for a quarter point rate hike in the next review, versus 81.8 percent a day earlier and 74.4 percent a week earlier.

In tandem, the Dollar Index which measures the Dollar’s strength against a basket of 6 currencies has increased 0.46 percent overnight to 103.38.

Market focus has now shifted to the Fed’s preferred PCE-based inflation readings due on Friday. The annual core PCE index is seen steady at 4.7 percent. The corresponding month-on-month reading is seen falling to 0.3 percent, from 0.4 percent in the previous month.

Overall crypto market capitalization has risen to $1.18 trillion, from $1.17 trillion a day earlier.

Bitcoin rallied to $30,587.72, adding 1.3 percent in the past 24 hours and 1.2 percent in the week. Bitcoin’s dominance of the market also increased to 50.4 percent from 50.02 percent a day earlier.

Ethereum edged up 0.10 percent in the past 24 hours. It is currently changing hands at $1,858.22. Ethereum’s dominance of the market has however slipped to 18.97 percent from 19.06 percent a day earlier.

3rd ranked Tether (USDT) which enjoys a crypto market dominance of more than 7 percent traded between $1.0006 and $0.9996 in the past 24 hours, close to the range a day earlier.

4th ranked BNB (BNB) added 1.3 percent in the past 24 hours. Meanwhile German regulator BaFin has reportedly rejected Binance’s application for a license to operate in Germany. BNB is the highest-ranking crypto to trade with losses on a year-to-date basis, having shed close to 4 percent in 2023.

5th ranked USD Coin (USDC) also traded within the range of $1.0005 to $0.9997, like a day earlier.

6th ranked XRP (XRP) shed 0.40 percent overnight and 5.8 percent in the past week. Despite expectations of favorable win in the lawsuit against SEC, the cryptocurrency has gained only 39 percent on a year-to-date basis which is much lower than the year-to-date gains made by Bitcoin (BTC) or Ethereum (ETH) or Solana (SOL).

7th ranked Cardano (ADA) added close to 1 percent in the past 24 hours. ADA has however dropped 6.5 percent in the past week amidst FUD surrounding offloading of ADA by Robinhood and Celsius.

8th ranked Dogecoin (DOGE) shed 0.9 percent overnight. Leading meme-cryptos Doge and Shiba Inu (SHIB) have lost more than 10 percent over the past 30 days making 66th ranked Pepe’s (PEPE) gains of 8 percent during the same period noteworthy.

9th ranked Solana (SOL) jumped 8.3 percent overnight and is the best performing crypto among the top 50 cryptocurrencies.

10th ranked Tron (TRX) is trading near the flatline. Despite gains of more than 3 percent made in the past week, the crypto is saddled with losses of around 4 percent in the past 30 days.

17th ranked Dai (DAI) which occupies around 0.40 percent of the overall crypto market, saw its 24-hour trading range widening to the $1.0012 to $0.9961 range, versus the high of $1.0008 and the low of $0.9979 touched a day earlier. The asset-backed stablecoin has since recovered to $0.9998.

20th ranked Binance USD (BUSD) traded between $1.0010 and $0.9988 in the past 24 hours, not drifting much from the range a day earlier. BUSD has since recovered to $1.00.

24th ranked True USD (TUSD) is currently trading at $0.9993, after falling to $0.9981 earlier in the trade. The day’s high for the stablecoin was $1.00.

90th ranked Compound (COMP) topped the gainers, rising more than 23 percent in the past 24 hours. The crypto token of the DeFi lending protocol has gained 69 percent in the past week and 38 percent over the past 30 days.

Meanwhile, an analysis by research firm Kaiko has revealed that Bitcoin’s correlation with the tech-heavy Nasdaq has touched its lowest level in almost three years.

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