Bitcoin rallied as high as $20,400 for the first time this month before falling back near $20k amid US economic data that beat expectations.
Under pressure from central banks around the world's determination to quell inflation, the global bond market has fallen into a bear market.
Bloomberg's index, which measures total yields on government bonds and investment-grade corporate bonds, has fallen more than 20% from its peak in 2021. This is the steepest decline since the index's inception. in 1990. Officials from the United States to Europe have expressed determination to tighten monetary policy in recent days, following the "hawkish" messages from Fed Chairman Jerome Powell at the Jackson Hole Conference .
High inflation coupled with aggressive interest rate hikes has put an end to the 40-year bull market of global bonds. This creates an extremely difficult environment for investors this year, with bonds and stocks falling in tandem.
“I suspect the long bull market in bonds – which started in the mid-1980s – is coming to an end,” said Stephen Miller, investment advisor at GSFM.
The sharp decline in bonds and stocks together is throwing cold water on a key investment strategy over the past 40 years. Bloomberg's bond-tracking index fell 16% in 2022, while the MSCI's index of global equities fell even more.
Against this backdrop, the classic 60/40 portfolio strategy—that is, allocating a portfolio in a 60/40 ratio between stocks and bonds—also failed. An index that tracks these categories is down 15% since early 2022, about to record its worst performance since 2008.
According to the US Bureau of Labor Statistics report in August, the US economy added 315,000 jobs in August. This number is just below the Dow Jones consensus estimate of 318,000, while the unemployment rate Industry rose to 3.7%, slightly above expectations of 3.5%.
Indicators should help cool markets on worries that a much more vibrant labor market will allow the Fed to raise rates much more aggressively as it tries to rein in inflation.
Global markets have been unsettled since Friday following hawkish statements from Fed Chairman Jerome Powell and other central bank officials.
Overnight, the Dow Jones Industrial Average rose 145 points, or about 0.5%, to 31,656. The S&P 500 rose 0.3% to 3,966.85 and the Nasdaq Composite fell 0.3% to 11,785.
On the contrary, the US dollar has been falling step by step, looking like it will slide below 109.
It is reported that the G7 has agreed to implement a price cap on Russian oil, with the European Union also planning to target the country's gas imports.
European stocks had a negative start to the new trading month on Thursday, with the European blue chip index closing 1.8% lower, ending August in the red. Investors there are facing further downward pressure from the prospect of a growing recession in the euro area and the UK, with energy shortages arising from Russia's war in Ukraine, spurring pushed up the cost of living crisis and soaring inflation.
Oil prices rose on Friday on expectations OPEC+ would discuss production cuts at a meeting on September 5, despite concerns about China's COVID-19 curbs and weakening of the economy. The global economy has covered the entire market.
Brent oil futures rose 66 cents to $93 per barrel, while WTI crude futures rose 26 cents to $86.8 per barrel. Both benchmarks fell 3% to two-week lows in the previous session. Brent is down 7.9% and WTI is at -6.7% on the weekly frame.
On the same day, gold rose more than 1% after US jobs data mostly matched expectations, but it remained tied for a third consecutive week of losses pressured by a rising interest rate environment. Spot gold rose 0.9% to $1,711 an ounce. Prices are still down 1.5% for the week. US gold futures were up 0.8% at $1,723.
Meanwhile, Asia-Pacific markets were mixed on Friday as investors looked to the US August jobs report, a key indicator ahead of the next US interest rate decision. Fed at the end of this month.
South Korea's consumer price index rose more than expected - 5.7% in August year-on-year, lower than the 6.1% figure analysts expected in a Reuters poll .
The Nikkei 225 in Japan was mostly flat at 27,650 while the Topix index fell 0.27% at 1,930. Hong Kong's Hang Seng index fell 0.66% in the last hour of trading and the Hang Seng Tech index fell 1.28%.
In Australia, the S&P/ASX 200 closed down 0.25% at 6,828. Kospi in Korea lost 0.26% to 2,409 and Kosdaq lost 0.31% to 785.8.
Mainland China's Shanghai Composite edged up slightly to 3,186 and the Shenzhen Component was slightly lower at 11,702.
Bitcoin and altcoins
Data from TradingView shows BTC hit $20,500 after Wall Street opened and hit a new September high. Cryptocurrency The largest reacted well to August U.S. nonfarm payrolls and jobs data showing a smaller-than-expected drop in capital inflows.
Combined with the decline of the US dollar, Bitcoin has inched closer to the region of around $20,700, which has been seen as a launchpad for a short squeeze – the liquidation of short positions providing a rapid spike in spot prices.
In a tweet on the day, trader Daan Crypto Trades shows that a low liquidity area remains overhead, likely not providing much resistance.
“The white area is pretty thin considering the recent volume profile. It should be relatively easy to navigate through that area.”
$BTC White area is quite thin in terms of recent volume profile.September 2, 2022
Should move through that area with relative ease.
Needs some spot bid to support price of course or we'll get those wicks taking out stops and reversing pic.twitter.com/hRX2Z1Ww2h
Meanwhile, from a long-term perspective, the two analysts assert there is reason to remain bullish on the current price action.
Trader Alan noted similarities to the bear market of 2015 and argued that if history repeats itself, BTC/USD is about to bottom.
Historically, one of the bear markets in $BTC was completed by two big bear flags.September 2, 2022
The current chart pattern is very similar.
Breakdown of the 2nd bear flag was the last step just before a massive bull run in 2015.
RT and FOLLOW appreciated#Bitcoin #BTC #Cryptos pic.twitter.com/2ivFqKBgkM
The Plan C Twitter account matched the realized losses (USD) with the market capitalization of Bitcoin to create the index of “extreme surrender”.
The results show that only Bitcoin's 2018 bear market trap was a stronger capitulation than it is now.
Another series of on-chain indicator posts from PlanC during the day reinforced the notion that the current market behavior is echoing bear market macro bottoms.
The rest of the top 100 are trading mixed. On the upside, YFI leads with a profit of 9%, followed by LTC +6%, 1inch, LDO and CHZ both increased 4%. On the opposite side, HNT dropped the most with a loss of 6% on the day, while the altcoin The remaining decrease is recorded at a loss knife 1-3% motion.
Investor sentiment remains in the extreme fear zone with the greed and fear index at 21 at press time.