Cryptos Whipsaw As Dollar Rises, Yields Surge

After a brilliant rally a day earlier, cryptocurrencies shed more than 2 percent in the past 24 hours as the U.S. dollar surged and bond yields hardened, amidst strong manufacturing sector data. The muted volumes in Ether Futures ETFs also diminished the ETF frenzy which had lifted crypto prices in the recent sessions. The commencement of the keenly watched trial of Sam Bankman Fried also dampened sentiment.

The Dollar’s strength, as measured by its performance against 6 currencies in the Dollar Index, jumped to a high of 107.21, versus 106.90 at the previous close. The levels were last touched in the third week of November 2022.

The rise in bond yields, which increases the opportunity cost of holding non-interest-bearing cryptocurrencies also weakened market sentiment. Ten-year U.S. bond yields touched a high of 4.752 percent, which was the level last seen in the middle of 2007. The rise in yields follows the recent PMI update from U.S. which showed an uptick in manufacturing sector that surpassed market expectations. The ISM Manufacturing PMI increased to 49 in September from 47.6 in the previous month, whereas markets had expected only a marginal uptick to 47.8. The reading, which reflected the slowest contraction in the US manufacturing sector in ten months also triggered fears of the Fed keeping interest rates higher than expected for a period longer than expected to ensure a decisive inflation combat.

Reports of blockchain analytics company Chainalysis implementing another round of layoffs covering 15 percent of its employees, also diminished sentiment in crypto sphere.

Anxiety was also writ large ahead of the Job Openings and Labor Turnover Survey for August due for release on Tuesday morning. The number of job openings is seen steady at 8.8 million. The non-farm payrolls data for September is due on Friday. The U.S. economy is expected to have added 170 thousand jobs in September versus 187 thousand in the previous month. The labor market update is expected to be a key factor in the Fed’s decision on interest rates.

Bitcoin slipped 2.7 percent overnight to trade at $27,540.52. BTC is however holding on to gains of 5 percent over the past week and 66 percent in 2023. The leading cryptocurrency traded between $28,494 and $27,348 in the past 24 hours.

Ethereum dropped a bit more, shedding 4.2 percent in the past 24 hours. Ethereum traded between $1,733.94 and $1,646.08 in the past 24 hours. Meanwhile, Grayscale Investments has announced that it has partnered with NYSE Arca to file for approval from the U.S. SEC to convert its Grayscale Ethereum Trust (ETHE) to a spot Ethereum ETF.

4th ranked BNB (BNB) shed 2.5 percent in the past 24 hours. Weekly gains are close to a percent.

5th ranked XRP (XRP) slipped 2.6 percent overnight but has gained 1.7 percent in the past week.

7th ranked Solana (SOL) is trading 0.1 percent lower amidst gains of more than 23 percent accumulated over the past week. Solana’s losses are the least among the top 10 cryptocurrencies.

8th ranked Cardano (ADA) slipped 2.4 percent overnight, limiting weekly gains to 6.2 percent.

9th ranked Dogecoin (DOGE) dropped 3 percent overnight. Weekly gains are close to 2 percent.

10th ranked TRON (TRX) slipped 2 percent overnight. TRX has gained 3.6 percent in the past week.

Among the top 10 non-stablecoin cryptocurrencies, Toncoin (TON) is the only cryptocurrency to trade with losses over the past week. TON shed 4.8 percent in the past week. On a year-to-date basis, BNB (BNB), Dogecoin (DOGE) and Toncoin (TON) are all trading with losses exceeding 11 percent. Polygon (MATIC) has shed more than 25 percent in 2023.

Only three among the top 100 cryptocurrencies are trading in the overnight green zone. 46th ranked Bitcoin SV (BSV) is the biggest gainer with a rally of 7.4 percent. 80th ranked Gala (GALA) followed with gains of 5.1 percent in the past 24 hours. 20th ranked UNUS SED LEO (LEO) added 1.3 percent.

97th ranked Pepe (PEPE) is the greatest laggard, shedding more than 10 percent in the past 24 hours. 81st ranked Sui (SUI) slipped around 8.5 percent. 50th ranked THORChain (RUNE) and 91st ranked Compound (COMP), both declined more than 7 percent.

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