Coinbase analysts expect crypto market participants to remain cautious, with Ether and Solana showing higher betas. According to Thursday’s Coinbase Weekly report, these altcoins have increased sensitivity to market movements and may react more strongly to changes in the broader crypto market.
“We expect market participants to remain cautious about their risk exposures in the coming weeks. Ethereum
-3.34%
and 
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-1.41%
Coinbase analyst David Duong said, “They are currently showing greater sensitivity to the overall crypto market with higher betas of around 0.85 and 0.83 respectively.” The Coinbase analyst noted that Solana and Ether have been the main “beta plays” in the crypto market and have shown greater volatility than the overall market.
Cryptocurrency Markets Still Stagnant Despite Lower Inflation Figures
According to Eliézer Ndinga, 21Shares’ Head of Strategy and Business Development, the latest inflation data, which shows a cooling but stable inflation environment, is crucial for crypto markets, especially after the overall market downturn last week. However, the largest crypto by market cap was not swayed by the inflation numbers this week, while stock indexes rose. The annual U.S. core consumer prices rose in July at the slowest pace since 2021, according to inflation figures released on Wednesday.
“With inflation occurring as expected, the Fed is more likely to cut rates by a smaller 25bps, which could support riskier assets. However, bitcoin and ether reacted negatively in the immediate aftermath due to expectations of a more dovish rate cut,” Ndinga told The Block.
The CME FedWatch tool currently shows that rate traders are betting there is a 62.5% chance that the Fed will cut rates by 25 basis points next month, and a 37.5% chance that there will be a 50 basis point cut at the September 18 Federal Open Market Committee (FOMC) meeting. Rate cuts typically provide more liquidity to the market, encouraging investors to seek higher yields in riskier assets such as Bitcoin and Ether.
Despite the slowdown, BRN analyst Valentin Fournier sees the current dip as a strategic buying opportunity and expects Bitcoin to rally and target the $65,000 to $68,000 range in the short term, aided by the upcoming rate cut and the easing of pressure on risk assets. “This minor dip is a good time to continue increasing exposure to both cryptocurrencies as a larger rally is set to occur before the end of the year,” Fournier told The Block.
Daily spot market volume plummets
According to The Block’s data dashboard, the seven-day moving average of Bitcoin trading volume fell to $11.5 billion from $19.62 billion last week.
The seven-day moving average of total spot market volume on major cryptocurrency exchanges, including Binance and Coinbase, has also fallen from $60 billion last Thursday to $36 billion today, according to data from The Block.
According to a Crypto Weekly report on Thursday, the surge in volume could be attributed to a market shock caused by the unwinding of carry trades funded by the Japanese yen, which “acted as a drag on nearly every market.”
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