Crypto Market Weekly Review (September 1-7): US employment data supports a resumption of interest rate cuts in September, while new SEC regulations cool down treasury companies.

US employment data for the week signaled a cooling labor market, with job openings, initial claims, and non-farm payrolls all coming in below expectations. This pushed the probability of a Fed rate cut in September to nearly 90%.
The expectation of resumed rate cuts supported a rebound in US stocks, with major indices hitting record highs, while Treasury yields fell and gold surged.
BTC saw a 2.66% weekly increase, closing at $113,478, but remained within a consolidation range and below key technical resistance.
A significant negative came from new SEC guidance, requiring crypto treasury companies (DATs) to get shareholder approval before issuing shares to fund crypto purchases. This is expected to slow their acquisition pace, a major source of market demand, and caused their stock prices to plummet.
Other headwinds included continued weakening inflows into BTC Spot ETFs and increased selling from long-term holders, who reduced holdings by over 40,000 BTC.
Despite short-term turbulence, the medium-term outlook is cautiously optimistic as the restart of the rate cut cycle is expected to ultimately support upward pricing for risk assets like crypto.

Author: 0xBrooker

 BTC daily trend

BTC opened at $108,247.95 this week and closed at $113,478.00, with a low of $111,129.61 and a high of $113,390.00, a decrease of 3.41% and an increase of 2.66%. The trading volume shrank compared with last week.

From a medium-term perspective, BTC remains mired in market turmoil, fueled by the "revision of interest rate cuts" and the "Federal Reserve independence debate." From a short-term perspective, BTC prices have fluctuated over the past week, driven by employment data and changes in industrial policy.

The overall employment data is in line with the expectation of a "mild cold snap", which pushes the probability of a rate cut in September to around 90%. The expectation of three rate cuts this year has rebounded, but is still very low.

The SEC said it will strengthen supervision of crypto treasury companies' issuance of additional shares to acquire cryptocurrencies. This has suppressed the financing activities of treasury companies, the current largest source of purchasing power in the market, and is also one of the reasons for the market's decline.

EMC Labs maintains a cautiously optimistic attitude in the medium term. The rebalancing of market forces before and after the interest rate cut is bound to be bumpy, but the overall US economy is safe, and the restart of the interest rate cut cycle will support the upward pricing of risky assets, which is still certain.

Policy, macro-financial and economic data

On September 4, the JOLTS job vacancy data was first released. The announced value of 8.4 million was lower than the expected 8.7 million and the previous value of 8.9 million, and it fell to a three-year low, further confirming that labor demand is cooling.

On September 5th, the weekly initial jobless claims data came in at 232,000, slightly exceeding market expectations of 230,000. Continuing claims were also slightly higher at 1.751 million, also slightly exceeding market expectations of 1.740 million. Both figures suggest a slowing labor market.

On September 6th, non-farm payroll data showed that 173,000 new jobs were added in August, below market expectations of 180,000 and the previous reading of 190,000. The unemployment rate also rose from 4.0% to 4.1%, reaching its highest point since 2021, indicating a significant cooling in the labor market.

The mild cooling of the employment data suggests that the economy and employment are cooling, which has reaffirmed market expectations of a September rate cut. FedWatch shows a near 90% probability of a September rate cut, with a small probability of a 75 basis point cut. This is a slight revision to last week's expectations.

This correction led to a rebound in US stocks after two consecutive weeks of decline. The Nasdaq rose 1.14% and the S&P 500 rose 0.33%, with all three major indexes hitting record highs. Yields on both long- and short-term US Treasury bonds continued to decline, falling by 2.3% and 2.03%, respectively.

There's no risk of an interest rate cut, and the magnitude and frequency of these cuts remain priced in. The US dollar index, while fluctuating, fell 0.11% this week to 97.737. Gold surged 3.52% to $3,639 per ounce.

Crypto Market

Following a sharp decline last week, BTC rebounded 2.66% this week, barely breaking through the "Trump bottom" (90,000-110,000 US dollars frame), but was still suppressed by the "bull market first rising trend line" and still fell below the 20-day line.

Over the past two months, BTC's attempt to start the "fourth wave of rise" ultimately failed and returned to the adjustment range. In addition to the impact of the interest rate cut cycle, it is also related to the shift of funds and the "cold reception" of policies.

According to eMerge Engine data, BTC Spot ETF channel funds have weakened for several consecutive weeks, and the procurement scale of treasury companies has also declined significantly.

On the regulatory front, the SEC this week issued updated guidance on crypto treasury companies (DATs), adding them to the regulatory agenda for national exchanges/ATSs and requiring them to obtain shareholder approval before diluting their holdings to finance crypto asset purchases. This new regulation will undoubtedly slow the pace and scale of acquisitions by treasury companies, and the market sees it as a significant negative. The stock prices of many DATs have plummeted, negatively impacting the trading prices of Bitcoin, Ether, and other cryptocurrencies.

In addition to cooling industrial policies and a cooling capital inflow, long-term selling also played a significant role in the weakening BTC price. According to on-chain data, long-term holders reduced their holdings by over 40,000 BTC this week, significantly higher than last week.

The current price of the currency is close to the short-term holding price, indicating that the downside risk has been reduced.