Cryptocurrency markets remained under pressure during U.S. trading hours on Thursday, continuing a pullback that began a day earlier when the Fed signaled it only expected to cut rates once this year.
The price of ether (ETH) for a led a mid-morning bounce after U.S. Securities and Exchange Chairman Gary Gensler – in testimony at a Senate hearing – said he expected spot ether ETFs to have received full approvals from his agency by the end of the summer.
The news sent ether higher by 1%, but it turned out to have been a selling opportunity, with the price reversing more than 3% just one hour later. At press time, ether was changing hands at $3,440, down 5% over the past 24 hours. The broader CoinDesk 20 Index was lower by 4.9% over the same period.
Also lower by nearly 5% was the price of bitcoin (BTC), which was trading near a one-week low of $66,300.
Markets began heading south on Wednesday afternoon after the Federal Reserve’s hawkish policy meeting results. The U.S. central bank held its benchmark fed funds rate range steady at 5.25%-5.50%, but surprised with its updated projections suggesting an expectation for just one 25 basis point rate cut in 2024. Rate futures markets, meanwhile, had been pricing in two to three 25 basis point moves this year.
Failing to improve the macro mood in crypto was U.S. economic data Thursday morning suggesting a continued softening in both the inflation and the economy. The May Producer Price Index (PPI) fell 0.2% against expectations for a rise of 0.1%. On a year-over-year basis, PPI was higher by 2.2% versus forecasts for 2.5%. There were also initial jobless claims which rose to nearly a one-year high of 242,000 versus expectations of 225,000.
“$66K seems like equilibrium,” said well-followed analyst Skew in an X post, who along with others is trying to decode a market that won’t go sustainably higher despite a lot of recent bullish news: improving inflation data, a Bitcoin-friendly presidential frontrunner in Donald Trump, spot ETH ETF approvals, and other risk asset markets (namely U.S. stocks) ripping to new all-time highs.