CoinDesk 20 Down 7%, Bitcoin Sinks by 5% as Asia Trading Week Begins

Nearly $175 million in long liquidations as broader market contracts

The CoinDesk 20 (CD20) index opened the Asian trading week with a 7% decline, while bitcoin fell by 5% amid rising expectations for a Federal Reserve rate cut in September.

Nearly all of the assets included in the CD20 index were trading in the red, and most were posting larger losses than bitcoin. Ether (ETH) fell by 5.8%, Solana (SOL) dropped 7.8% and XRP fell by 7%. According to data from CoinGlass, nearly $175 million in longs were liquidated over the last 24 hours.

BTC is now down 13% over the last week, which puts it in a similar range to the aftermath of the FTX collapse.

Stronger-than-expected U.S. jobs data, but a rising unemployment rate, has penciled in a Fed rate cut for September, according to a recent note by ING.

"Private sector job growth was particularly weak, with only 136,000 jobs added in June, below the 160,000 expected. Government, education and healthcare services contributed nearly 60% of the new jobs, while retail, temporary help, professional business services and manufacturing all saw job losses," wrote James Knightley of ING.

Citi Research is making a more aggressive prediction. "We forecast eight Federal Reserve rate cuts starting in September 2024 through July 2025, lowering the benchmark rate by 200 basis points to 3.25%- 3.5%," wrote the bank in a recent note.

Betторов on Polymarket are punting that the Fed will have 1-2 rate cuts by the end of the year, with a 34% chance of 1 cut and a 37% chance of 2.

The so-called dovish Fed expectations also failed to lift Asian stocks as the European Union's decision to impose steep tariffs on the import of Chinese electric vehicles soured the sentiment. Elsewhere, French voters gave leftists more seats than far right but failed to secure a majority, leaving a potentially hung parliament, a recipe for political and policy paralysis and potential risk aversion in European markets.

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