In short
- Bitcoin hovered around $108,000 and Ethereum traded around $3,750, extending cautious positioning ahead of Friday’s US employment report.
- Bessent said high interest rates have “potentially pushed parts of the economy into recession,” fueling debate over whether future cuts would signal strength or stress.
- On-chain data shows Bitcoin stuck below a key cost base level of $113,000.
Crypto fell on Sunday as traders positioned themselves ahead of US employment data due later this week and digested comments from Treasury Secretary Scott Bessent suggesting high interest rates are starting to put pressure on parts of the economy.
Bitcoin was trading around $108,000, down about 1.7% in the past 24 hours, while Ethereum fell about 3.5% to almost $3,750, CoinGecko data showed.
Major tokens weakened across the board, with alt coins underperforming as investors took a defensive stance.
In one interview was broadcast this weekend, Bessent said CNN that the Federal Reserve’s restrictive policies have “pushed parts of the economy, particularly the housing market, into recession,” and argued that the central bank now has room to cut interest rates.
He warned that keeping borrowing costs high would put greater economic pressure, especially on indebted households.
Crypto initially strengthened on the prospect that Bessent’s comments could strengthen the case for easing, but gains faded as traders weigh whether cuts due to slowing activity could fuel short-term volatility rather than a pure liquidity boost.
Bitcoin’s dominance remained solid, indicating limited risk appetite for smaller tokens.
With US markets set to reopen on Monday, investors are focused on Friday’s employment report, due out at 8:30 a.m. ET. Economists expect a moderation in the workforce, while unemployment remains at recent levels.
The data will help clarify whether rate cuts reflect confidence in a soft landing or growing concerns that parts of the economy are weakening.
Statistics on the chain also point to waning momentum.
Bitcoin has failed to climb back above its short-term cost base of nearly $113,000, a level that some analysts consider the dividing line between bullish and corrective phases.
The threshold has capped prices for three weeks after six months of trading above it, signaling weakening demand at current levels, Glassnode wrote in a report last week.
A sustained decline to the downside raises the risk of a deeper pullback, with the next significant support around $88,000, Glassnode analysts wrote.
That is based on the realized cost base of actively circulating supply, a level that has marked corrective phases in previous cycles.
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