Key Takeaways
The crypto market bounced slightly as BTC attempted to reclaim $110K. However, caution still remains ahead of key macro data and September’s seasonal weakness.
Bitcoin [BTC] recovered about 3% earlier in the week after dropping below $107K over the weekend.
The brief bounce offered the broader market relief, but only across the top majors and select tokens.
Source: CryptoRank
Notably, Ethereum [ETH] defended $4.2K and traded at $4.3K at press time. Solana [SOL] was up about 2% and stayed above $200 while Ripple [XRP] defended the $2.8.
Despite some recovery, a large portion of the market remained in negative territory at the time of writing.
This cautious sentiment was not unexpected, given the looming release of key U.S. labor market data and historically weak performance trends typical of September.
Liquidity boosts the market
Part of the recovery was fueled by the expected reopening of U.S. banks on the 2nd of September, after remaining closed on Labor Day, held on the 1st of September.
This extended weekend, caused by the holiday, led to thin liquidity, which in turn contributed to heightened volatility and increased sell-offs.
With summer holidays officially over, market participation was expected to rise, potentially improving overall liquidity. Nevertheless, investor sentiment remained cautious, largely due to concerns about historical September trends.
Historically, September has been the worst-performing month for Bitcoin, with average losses of around 3%. June follows closely, making it the second-worst month for the asset.
Source: CoinGlass
Will it defy the historical performance ahead of expected Fed rate cuts on the 17th of September?
Before the Fed decision, key U.S. labor market data sets, the JOLTS Job Openings report, and the Non-Farm Payroll, will be released on Wednesday and Friday.
Since the Fed uses these data sets in its rate cut decision, these releases could impact BTC price action.
At the time of writing, the market consensus (91% chance) leaned towards a 25 bps rate cut at the next Fed meeting.
That being said, the key liquidity clusters and potential price magnets existed at $114K and $106.6K-$107.2K
Source: CoinGlass
In other words, the expected volatility around the upcoming macro data could trigger price swings around the above levels.
With BTC dominance also holding steady at 58%, most of the altcoins may remain range-bound until the king coin set’s clear market direction.
