The general sentiment in the crypto market seems to be turning bearish as Bitcoin and Ethereum record losses over today’s trading session. Although the market capitalization of larger cryptocurrency cryptocurrencies still shows some growth, they seem to be on track for an uncertain week.
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Bitcoin (BTC), which trades at $22,100, has suffered a 3% drop in 24 hours. In the interim, Ethereum trades at $1520, with a 6% gain over the same time period.
The crypto market faces some hurdles with this week’s public companies’ earnings reports. Risk-on assets might resume their bearish trend if the market doesn’t expect public companies to perform as expected.
Jurrien Timmer, Director of Macro for investment firm Fidelity, believes this earnings season has been “boring”. Only 104 U.S. companies have yet to release their earnings reports, including Meta and Apple.
The U.S. Federal Reserve could also announce an interest rate hike. Market participants anticipate a 50-75 basis point increase. Anything higher combined with poor earnings seasons could cause downside volatility in crypto assets.
Timmer will be presenting the earnings season’s second week in this blog. saidThe following chart shows the shares:
After all the handwringing about “the next shoe to drop,” a boring earnings season would be a relief. So far, Q2 has been just that with 72% beating or lowering estimates an average 4.3%. Only 104 companies reported so far, but it’s good start.
Crypto Investors Should Prepare for The Worst
More data provided by Timmer hints at an extension of July’s bullish price action for the S&P 500. This major index records a 16% drop since January 2022 and could trend higher forming a “risk rally” if “earnings growth” continues to hold.
Bitcoin, Ethereum and the crypto market saw positive appreciation over the past few months following a Fed event. On Wednesday, the Federal Open Market Committee will meet.
According to Timmer’s conclusions, if earnings remain “boring” the crypto market seems likely to push further upwards. With a 100-bps rise in interest rates, however, Fed may reduce the risk of assets.
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Via Twitter, a pseudonym analyst makes the case for a hawkish Fed on the back of “solid” data recorded by the U.S. jobs markets. This data might hint to the financial institutions that they can “keep pushing until something breaks”. Analyst said:
The Fed is willing to tighten monetary policy if the US economy continues to be strong. Fed knows that a weakening employment market will calm inflation. When people lose their jobs, and they don’t have enough money to buy it, the demand side pressures will decrease. The supply-side can then normalize.