Crypto Market Prepares for Volatility Amid Nvidia Earnings, FOMC Minutes, and Job Data Releases
Market Overview: Key cryptocurrencies such as Bitcoin, Ethereum, and XRP are retracting gains as the crypto market anticipates potential sell-offs ahead of major economic events, including Nvidia's earnings report, the release of FOMC minutes, and nonfarm payroll data.
Impact of Japan's Bond Yields on Crypto
The surge in Japan's long-term government bond yields to historical highs has triggered a downturn in Bitcoin and the wider crypto market. This is amid concerns over global liquidity tightening and the possible unwinding of Yen carry trades.
Japan's 40-year government bond yield reached a record 3.697%, as markets prepare for Prime Minister Sanae Takaichi's stimulus plan. This surge in yields could lead to a significant unwinding of Yen carry trades, which are globally exposed at $20 trillion, potentially affecting markets, including Bitcoin.
Upcoming Nvidia and FOMC Events
The crypto market is on edge as Nvidia is set to report its Q3 earnings amid concerns over an AI bubble. This will influence Wall Street's AI-driven investments. Additionally, the FOMC minutes release is anticipated, with markets revising expectations of a December Fed rate cut.
The CME FedWatch tool indicates less than 49% odds for a 25 basis point Fed rate cut, reflecting a divided stance among Fed officials. Meanwhile, President Donald Trump plans to replace Fed Chair Jerome Powell, which could heighten short-term market volatility.
Focus on Jobs Data
The upcoming nonfarm payroll and unemployment rate data will be crucial, being the first job data release post-government shutdown. The White House has confirmed no CPI and jobs data will be released for October. Ethereum's price hovers above $3,000, while XRP remains near $2.15, with analysts predicting potential price drops due to whale distributions in this early bear market.
Bearish indicators persist in the market, highlighted by the Bull-Bear Structure Index, which points to negative taker flow, sustained derivatives pressure, and continuous ETF outflows.