Bitcoin, XRP, Ethereum Prices Fall Further. What Could Reverse the Crypto Slump. — Barrons.com
By Elsa OhlenBitcoin and other cryptocurrencies extended their losses Friday, at the end of a week that has seen the biggest deleveraging of the year. It comes ahead of inflation data, expected to be key for the path of interest rates.Bitcoin was down 2.3% over the past 24 hours to $109.190, bringing seven-day losses to 5.6%, according to CoinDesk data.The world's second largest crypto by market value, Ether, and Ripple's XRP both fell 3.2% each.Solana has seen the most pronounced losses lately as the crypto sector is experiencing a slump. The token was down 4.7% to $192.90 early Friday, extending losses over the past seven days to 19%.The moves come ahead of the August personal consumption expenditure price index data (PCE), scheduled for 8:30 a.m. Friday. The Federal Reserve lowered interest rates by 25 basis points last week, however, officials say they'd like to see more progress on inflation before committing to more cuts this year, Barron's has reported.If PCE data comes in hotter-than-expected, it might push the central bank to pause cuts for now, which would likely have a negative effect on riskier assets like cryptos.While the inflation numbers could deepen the crypto slump, they could also end up helping tokens regain some losses, particularly if inflation is cooler than expected, increasing rate-cut odds. Higher interest rates tend to dampen traders' appetite for risk-assets, and vice versa.The deleveraging event that started earlier this week came as digital-asset investors unwound bullish bets made after the Fed's latest interest rate cut.Write to Elsa Ohlen at [email protected] content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.