After plunging below $80,000: Bitcoin on track for heftiest monthly loss since 2022
Bitcoin tumbled over 7.5% on Friday and resumed the losses while piercing the important barrier of $80,000 and plumbing three-month lows, on track for the heftiest monthly loss since 2022 on risk aversion.
The crypto market is still tense amid a lack of positive stimuli, while US stocks continue to tumble on Wall Street, led by the tech sector.
Prices
Bitcoin tumbled over 7.5% at Bitstamp today to $78,018, the lowest since November 10, with a session-high at $84,798.
On Thursday, bitcoin rose 0.7%, the first profit in five days on quick short-covering.
Crypto Market Value
The market value of cryptocurrencies fell by $175 billion on Friday to a total of $2726 trillion, the lowest since November.
Monthly Trades
Bitcoin is down over 11% in February so far, on track for the largest monthly loss since June 2022.
Positive Stimulus
Bitcoin started the year with strong momentum, underpinned by US President Trump’s positive stance on the crypto industry, with traders expecting a more supportive and clear regulatory framework for the crypto market.
But the steam has gone out of the market since Trump’s executive crypto order in January, as it was more conservative than expected, especially when it comes to forming a strategic bitcoin reserve.
And with the lack of fresh new stimuli, the market is now waiting for more signals on the future of regulations and institutional demand directions, making prices more volatile in recent weeks.
Wall Street
US stock indices extended their heavy losses on Thursday amid mounting monetary policy uncertainty and global trade tensions.
S&P 500 fell 1.6% to six-week lows, while NASDAQ slumped 2.75% to three-month lows, led by the tech sector.
US dollar expands gains to two-week high before US spending data
The US dollar rose in European trade on Friday against a basket of major rivals, expanding gains for the third straight session and hitting a two-week high, and on track for the first weekly profit in a month on strong investment demand with mounting concerns about Trump’s tariffs.
Recent bullish remarks by some Fed officials hurt the odds of a Fed rate cut in the first half of the year, with investors now waiting for crucial US personal spending data later today for January.
The Index
The dollar index rose 0.2% to 107.45, the highest since February 13, with a session-low at 107.18.
On Thursday, the index rose 0.8%, moving away from two-month lows at 106.13.
Weekly Trades
The dollar index is up 0.8% so far this week on track for the first weekly profit in a month.
Trump’s Tariffs
As Trump prepares to impose tariffs on Mexico and Canada, while threatening the EU and other countries with additional tariffs, inflationary concerns are mounting on the Federal Reserve, with interest rates likely remaining at current levels for an extended duration.
Cleveland Fed President Beth Hammock said she expects Fed’s monetary policies to remain steady for the time being.
Philadelphia Fed President Patrick Harker also supports maintaining borrowing costs steady at current levels.
According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut in March stood at 4.5%.
Now investors await important US personal consumption data later today to gauge the state of inflation in the world’s largest economy.
Gold plumbs three-week trough as US dollar advances
Gold prices skidded in European trade on Friday, hitting a three-week trough and about to mark its first weekly loss this year as the US dollar advances against major rivals.
It comes before US personal consumption data for January, upon which the Federal Reserve relies to estimate inflation levels in the country.
Prices
Gold prices fell 0.9% to $2851 an ounce, the lowest since February 6, with a session-high at $2885.
On Thursday, gold lost 1.35%, the second loss in three days on profit-taking away from a record high at $2956.
Weekly Trades
Gold is down 2.9% this week on track for the first weekly loss in 2025.
Gold marked its eighth weekly profit in a row last week, the longest such streak of gains since June 2020.
US Dollar
The dollar index rose 0.2% on Friday, expanding gains for the third straight session, and hitting a two-week high at 107.45 against a basket of major rivals.
A stronger dollar makes greenback-denominated gold futures costlier to holders of other currencies.
It comes as US President Donald Trump announced plans to enforce 25% tariffs on Canada and Mexico next week and not April as he previously suggested. He also plans additional 10% tariffs on Chinese imports, and pledged to impose 25% tariffs on EU cars and products.
US Rates
Cleveland Fed President Beth Hammock said she expects Fed’s monetary policies to remain steady for the time being.
Philadelphia Fed President Patrick Harker also supports maintaining borrowing costs steady at current levels.
According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut in March stood at 4.5%.
Now investors await important US personal consumption data later today to gauge the state of inflation in the world’s largest economy.
SPDR
Gold holdings at the SPDR Gold Trust fell 0.86 tons yesterday to a total of 906.1 tons, away from August 2023 highs at 907.82 tons.
Euro extends losses to two-week low on Trump's tariffs
The euro fell in European trade on Friday on track for the third loss in a row against the dollar, plumbing two-week lows on risk aversion as US President Trump vows tariffs on Canada, Mexico, and China next week.
Following recent bullish remarks by some Fed officials, the odds of a Fed rate cut in March fell, with traders now waiting for German inflation data later today to gather more clues.
The Price
The EUR/USD pair fell 0.2% today to $1.083, the lowest since February 13, with a session-high at $1.0404.
Euro closed down 0.8% on Thursday against the dollar, the heftiest loss since January 2 on Trump’s tariffs threats against the EU.
Trump’s Tariffs
Trump spoke about a 25% additional tax on European imports, including cars, in order to reduce the giant trade deficit with the EU.
He accused the EU of taking advantage of the US with the $300 billion trade deficit, asserting the tariffs will be imposed soon.
He said the EU doesn’t take US cars or agricultural products, but the US takes everything from them, including millions of cars and huge amounts of food and agricultural products.
EU leaders asserted in a Brussels summit their readiness to retaliate if the US imposed tariffs, however, they asserted the importance of negotiations and avoiding escalation.
European Rates
European Central Bank President Christine Lagarde said recent positive developments in the eurozone indicate a rate cut isn’t an urgent matter.
ECB member Isabel Schnabel asserted the importance of not rushing into taking more monetary easing steps, as interest rates are approaching neutral levels already.
Following such remarks, the odds of an ECB 0.25% rate cut in March fell from 65% to 55%.