Cryptocurrency market await key economic data


Major cryptocurrencies traded lacklustre on Wednesday as investors digested weaker-than-expected Chinese trade data and awaited the release of key economic data from the United States.

Bitcoin (BTC) was up 1.9% to $29,794, according to CoinDesk Indicies data, while ether (ETH) was trading at $1,858. The CoinDesk Indicies Ethereum Trend Indicator indicated that the token was set for a significant downtrend.

China recently reported a 12.4% year-over-year decline in imports in July, more than double the drop forecast by economists. Exports fell 14.5%, worse than estimates for a 12.4% drop. Declines at those levels haven’t been seen since the COVID-19 lockdowns, and the news suggests Beijing may have to take additional steps to stimulate China’s economy.

The U.S. 10-year Treasury yield has fallen 11 basis points to 3.98%, while European long-dated government bonds are seeing steeper declines. The upcoming Consumer Price Index (CPI) data for July, along with other economic factors such as a cooling job market but historically low unemployment rate, and nowcasts suggesting a 0.4% monthly rise in core CPI, may influence the Federal Reserve’s interest rate decisions for 2023.

In other economic news, Philadelphia Federal Reserve President Patrick Harker said in a speech that barring “alarming” new data, he’s fine with the central bank not hiking rates any further. He added, though, that the idea of considering rate cuts is a long way off.

Despite the subdued market, some market watchers remained upbeat about the longer-term growth of crypto markets. Jeff Mei, chief operating officer of crypto exchange BTSE, said the news that PayPal is introducing its own stablecoin (PYUSD) is a “significant development” in the digital finance landscape.

“Signifying the growing convergence between traditional financial systems and the world of crypto, this news is definitely bullish for the crypto market,” Mei said. “If the regulators do welcome this with open arms, we might see more U.S. fintech and payment companies proactively exploring digital currencies, and may even make a concerted shift toward new launches.”

Mei also pointed to new data from Glassnode showing that bitcoin balance on exchanges has slid to a 5-year low. This suggests that investors are holding onto their assets securely, signaling a belief that prices are likely to increase.

Similarly, the amount of ether on exchanges is also at a 5-year low. Meanwhile, the amount of ether active between 7-10 years ago is at an all-time high, suggesting that a strong cohort of hodlers are not budging.

Overall, the crypto market remains subdued as investors await key economic data from the United States. However, there are some signs that investors are becoming more bullish on the longer-term outlook for the market.

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