Welcome to Asia Pacific Morning Brief. An important digest of overnight cryptographic development that shapes regional markets and global sentiment. Monday’s edition is a summary of last week’s Bitcoin moves, with this week’s forecast coming from Paul Kim. Grab some green tea and look at this space.
The much-anticipated interest rate cuts finally became a reality last week, but Bitcoin prices have failed to rise. This is in stark contrast to Nasdaq, which correlated strongly with Bitcoin’s price, surged 1.7% over the same period.
The Fed’s “risk management” strategy
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Last week, the Federal Open Market Committee (FOMC) meeting of the Federal Reserve was one of the most important events of the month. The Fed has reduced the US federal funding rate by 25 basis points to 4.0%-4.25%. The majority of policymakers supported the move.
Speaking at a press conference after the announcement, Fed Chairman Jerome Powell framed the cut as a preemptive move to counter weak employment data.
Powell was clear when the reporter asked if the Fed was embarking on a new rate-cut cycle. He said this was “reducing risk management.” He added that the Fed will determine future rate movements for each meeting, depending on the data.
Since early August, risky asset investors have been pricing a series of ongoing interest rate reductions. Real-time pricing data for Binance Exchange shows that Bitcoin’s prices fell below the $115,000 level as Powell issued a statement.
The “risk” powell mentioned is a possibility in the contract labor market. US non-farm salary data for July is well below market expectations. Additionally, the recent August report showed a historic lowest amount of just 22,000 new jobs. The unemployment rate remains apparently stable at 4.3%, but the nature of employment data can deteriorate rapidly as it begins to soften, but does not require preemptive cuts.
The Fed is optimistic in the long term
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The Fed’s economic forecasts are optimistic and are forecasting growth beyond capacity until next year. This suggests that rate reductions were only precautions driven by concerns about the labour market.
Powell’s rejection of the rate-cut cycle quickly cooled down crypto investors who were riding high in line with these expectations. This is why Bitcoin prices returned to their starting point three days after the rate cut.
According to CME Group’s FedWatch tool, the market has priced two more interest rate cuts since October. However, expectations for interest rate reductions in 2026 have fallen from 3 to 2.
If job data improves in October or December, there could be a strong debate within the Fed and further reductions could be stopped. This is especially true when inflation is well above the 2% target. In that case, expectations for interest rate cuts in 2026 could be further reduced.
Altcoins show divergent trends
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Bitcoin prices are rising relatively. In contrast, Ethereum (ETH) fell 4.25% each week Consistent US spot ETFs and institutional purchase inflows.
Altcoins showed mixed performance based on individual news. Solana (Sol), which had a strong weekly rallies of almost 20% just two weeks ago, fell 2.25% last week.
Meanwhile, Binance Coin (BNB) has skyrocketed 11.80% in a week. This came amid rumors that CEO Changpeng Zhao (CZ) could potentially return to Binance after removing the word “previous” from his X-account bio.
Korean exchanges with strong retail markets and cryptocurrencies listed on Bithumb also earned significant profits last week. Euler (Eul), Plume (Plume) and Toshi (Toshi) each saw sharp but temporary spikes.
Last week: Fed speakers take the stage
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Several key economic data points will be released this week, including S&P Flash US service on Tuesday and manufacturing PMI on Friday, as well as PCE inflation and personal spending data.
However, the actual focus lies in speeches from Fed officials. Released after the September FOMC meeting, the Fed dot plot reveals a broad range of opinions on future paths for interest rates, and a strong statement could possibly appear in public speeches, driving the market.
Federal Governor Stephen Milan, The only member advocating the 50 Veges Point Cut at FOMC in September will be speaking on Monday. He is also believed to have stuck his pencil by the end of the year with a 175 basis points cut.
On the same day, Speech from Cleveland President Beth Hammack and RichmoND Fed President Tom Barkin will also be delivered. Hammack is believed to have voted for interest rate cuts this year, which the market cannot gain the advantage.
Other important speeches are scheduled for Tuesday, along with Michelle Bowman and Vice-Chair of Supervisors for Production Chairman Jerome Powell, and on Thursday Chicago Fried Ertan Ghoulsby. Their comments could introduce volatility to the price of Bitcoin, which is currently in a weak state of sentiment.
We look forward to the investors having a profitable week.
