Powell Dovish, US Stocks Rally, Bitcoin and Ethereum Lose Momentum

With Federal Reserve Chairman Powell releasing dovish signals, major U.S. stock indices closed higher across the board on Tuesday, 7/2. Tesla surged over 10%, the S&P 500 set its 32nd record high of the year. The Dow Jones Industrial Average rose 0.41%, the Nasdaq Composite increased by 0.84%, setting new records. However, BTC and ETH remained weak, not following the upward trend in U.S. stocks.

Powell Dovish, Offsetting Strong Jobs Data

According to a report by CNBC, Federal Reserve Chairman Powell expressed satisfaction with the progress on inflation over the past year during a monetary policy meeting in Portugal on 7/2. With the U.S. economy back on track for tightening monetary policy, significant progress has been made on inflation. However, he mentioned that he would like to see more progress before being confident enough to start cutting rates.

Powell's dovish comments offset the strong jobs data released in the U.S. yesterday. The data showed that job openings rebounded in May after a significant decline in the previous two months. According to the Job Openings and Labor Turnover Survey (JOLTS) report, on the last day of May, job openings measuring labor demand increased by 221,000 to reach 8.14 million, higher than economists' estimate of 7.91 million.

BTC, ETH Remain Weak, Not Following U.S. Stocks Higher

Cryptocurrencies remain slightly weak, with Bitcoin briefly surpassing $63,000 yesterday but then falling back, not following the uptrend in U.S. stocks.

According to data tracked by Arkham, the German Federal Criminal Police Office (Bundeskriminalamt or BKA) once again transferred BTC to exchanges Coinbase, Bitstamp, and Kraken yesterday. The BTC holdings have decreased from 50,000 coins on 6/29 to 43,549 coins, selling a total of 6,451 bitcoins valued at approximately $400 million.

Bitcoin selling pressure is heavy, with the U.S. and German governments successively selling off Bitcoin. Is a sell-off trend beginning?

Ethereum's trend is similar to Bitcoin's, showing a downward trend in the past 24 hours. The U.S. Securities and Exchange Commission (SEC) returned the S-1 form to potential Ethereum ETF issuers last Friday and requested them to resubmit by July 8. The delayed expectation for the launch of an Ethereum spot ETF has also dampened market sentiment.

Markets to Focus on Friday's Nonfarm Payrolls Data

Investors will focus on the minutes of the Federal Reserve meeting today, and Thursday is the U.S. Independence Day, with markets closing early ahead of the holiday. Friday will see the release of crucial U.S. nonfarm payroll data.