BTC’s rally shows signs of running out of steam

BTC's had a rough couple of weeks, and analysts are split on whether a recent rally is here to stay. Recent weeks had seen it rise by 30% to around USD 82.8k, before later dropping back down below the 80k mark. The rally had legs from Fed Governor Christopher Waller signaling he could support leaving interest rates unchanged this month, plus a weaker USD — but a hot jobs report reversed both almost overnight.

BTC dropped 2.8% to USD 79.2k the moment the jobs data landed, as the USD strengthened and two-year Treasury yields climbed, according to Bloomberg. US payrolls rose 162k in August — well above forecasts — reviving wagers on a September rate hike, which would tighten liquidity and dent risk appetite for an asset like BTC in one move. The Fed's next decision, at its 15-16 September meeting, is now the thing the whole market is waiting on.

For now, the bulls still have room to work with. BTC stays in bullish territory as long as it holds above roughly USD 71.8k — the midpoint of last month's rally, per Reuters' technical read. But the case for caution is building too. “A clear rebound doesn't settle the debate, it arms the hawks,” Sygnum Bank's Fabian Dori told Bloomberg.

The quality of the demand behind the rally is the bigger question mark. US-listed BTC ETFs booked two days of sizable outflows in the past week, Bloomberg reported separately. The seven-day average of the Coinbase premium — which tracks whether US buyers are paying above the global price — has stayed negative for more than four months, and even last month's rally wasn't enough to flip it positive. Translation: the American buying that usually powers BTC's bigger runs hasn't shown up for this one.

MEANWHILE- A USD 320 mn incident at a Bitcoin sidechain is the wildcard. Self-described white-hat hackers exploited a software bug in Liquid Network's Elements code to withdraw roughly 4k of the 4.2k BTC held in its Liquid Federation wallet, Liquid said in an X post. Blockstream, which built the sidechain, says no keys were compromised, and unlike most crypto hacks, the funds haven't moved since, and the parties involved are negotiating an on-chain return once the bug is patched. That's a different animal from Bybit's USD 1.5 bn theft last year, which triggered a selloff that dropped BTC by as much as 28.2% — but a market that's already jumpy on ETF demand doesn't need another crypto-security headline right now, whatever the eventual outcome.

MARKETS THIS MORNING-

Asia-Pacific markets surged in early trading, with South Korea’s Kospi up 1.4% and Japan’s Nikkei up 0.5%. Meanwhile, Wall Street equities were broadly in the red, weighed down by the Middle East conflict and escalating US-Canada trade tensions.

THE CLOSING BELL-

The EGX30 fell 0.1% at yesterday’s close on turnover of EGP 19.3 bn (69% above the 90-day average). Regional investors were the sole net buyers. The index is up 33.4% YTD.

In the green: GB Corp (+3.7%), Rameda (+3.6%), and Mopco (+3.2%).

In the red: Orascom Construction (-3.0%), Alexandria Containers and Goods (-2.5%), and Raya Holding (-2.3%).