LYKKE
Tuesday
30 May
bearish neutral

Cloudy weather with some sun lies ahead for the global crypto market, including Bitcoin and Ethereum, in the next 24 hours. This translates into a slightly bearish market with downside risk. Tropical conditions – very bullish with some upside potential – prevail for Ripple and Uniswap. The deal reached over the long weekend on raising the US debt ceiling left investors unmoved. So did the indirect consequence of the deal: the taxes proposed by the Democrats, including a 30 percent tax on crypto mining, are blocked. 

Over a one-week horizon, cloudy weather with some sun for both major cryptocurrencies –  Bitcoin and Ethereum. The outlook for Ripple is somewhat brighter signaling upside potential.

Cryptos edge lower as deal breakthrough was priced in 

The general cryptocurrency trend was negative over the past 24 hours though a deal on raising the US debt ceiling was reached after weeklong talks. The deal, which had been priced in by market participants, now needs to be ratified by the US Congress.

The deal has an indirect consequence on the US crypto universe as all taxes proposed are blocked. The Democrats wanted to introduce a 30 percent tax on crypto mining.

“One of the victories is blocking proposed taxes,” the Republican Congressman Warren Davison tweeted. A similar tax could, however, come up in future bills, as the complete abandonment of its gist has not been discussed.

The price of Bitcoin fell 0.3 percent over the past 24 hours, after having traded above 28,000 US dollars over the weekend. Ethereum put on 0.1 percent. 

Among smaller altcoins, XRP rose 4.3 percent to a one-month high of around 0.5 dollars. XRP volumes have soared over the weekend on South Korean crypto exchanges. There has been no news about the ongoing court case between XRP’s owner Ripple and the Securities and Exchange Commission (SEC). 

Crypto market affected by the release of US job data later this week

This week, investors will focus on the latest US job figures, which will be released on Friday. Analysts expect that 195,000 non-farm jobs to have been created in May, a slowdown compared to April’s 253,000 jobs. A figure around this level would confirm the absence of a recession in the world’s largest economy. 

The market thus increasingly prices in an additional 25 basis point rate hike a the Federal Reserve’s upcoming meeting in June. Its key rate is expected to be raised to 5.5 percent. Higher rates make risky assets such as cryptocurrencies less interesting to hold, as risk-averse investors then can generate higher returns with less risky assets such as bonds. 

DISCLAIMER
ATTMO, a weather-inspired AI tool, makes cryptocurrency predictions. It also forecasts longer-term cryptocurrency trends. These forecasts are not trading advice; they are only decision support tools. They do not include information that is specific to the user; in particular they do not account for their personal risk appetite or market assessment.