Bitcoin, Ether, Dogecoin dip; U.S. equities drop on recession concern

Bitcoin dipped below US$28,000 in Thursday morning trading in Asia as most other top 10 non-stablecoin cryptocurrencies lost steam. Ethereum edged lower, but held a weekly gain of over 5% as the blockchain’s Shanghai upgrade draws near. Dogecoin led the losers after a Tuesday surge triggered by Elon Musk switching the Twitter icon to a Shiba Inu dog. U.S. equities traded mixed on Wednesday as data showed a slowdown in the job market and services, raising worries among investors of a potential recession ahead.

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Fast facts

• Bitcoin dropped 2.47% to US$27,983 in the 24 hours to 9:00 a.m. in Hong Kong, down 1.34% for the week, according to CoinMarketCap data. 
• The world’s largest cryptocurrency has been fluctuating around the US$28,000 resistance level since late March. MicroStrategy, a U.S.-based business intelligence firm and the world’s largest corporate Bitcoin holder, said it acquired 1,045 Bitcoin for around US$29.3 million between March 24 and April 4, 2023, which could help investor sentiment.
• Ethereum dipped 1.03% to US$1896 but is up 6.04% for the week. The token reached a high of US$1,937.50 on Wednesday to trade above the US$1,900 mark for the first time since August 2022. The Shanghai hardfork of the Ethereum blockchain, also known as Shapella upgrade, will come next Wednesday, and allow investors to withdraw their staked ETH for the first time.
• Dogecoin led the losers, falling 4.66% to US$0,09127 but still made a weekly jump of 21.60%. Investors may be taking profits from the token’s surge earlier this week when Elon Musk on Monday changed the blue bird icon on the Twitter website to a Shiba Inu Japanese dog, the same image used by the meme coin. Musk has yet to say why he did it, other than to tweet out a meme.
• The total crypto market capitalization dropped 0.95% in the past 24 hours to US$1.19 trillion. Total trading volume in the same period edged up 0.14% to US$43.08 billion.
• In the non-fungible token (NFT) market, the Forkast 500 NFT index edged down 0.12% to 4,029.45 in the 24 hours to 09:00 a.m. in Hong Kong, but gained 0.61% for the week. The index is a proxy measure of the performance of the global NFT market and includes 500 eligible smart contracts on any given day. It is managed by Forkast Labs data branch, CryptoSlam. 
• NFT sales on the Ethereum blockchain rose 17.81% in the 24 hours to 09:30 a.m. in Hong Kong. This could be attributed to volume on OpenSea Pro, an NFT marketplace developed by OpenSea that targets expereinced investors and offers zero listing fees for a limited time, said Yehudah Petscher, NFT strategist at Cryptoslam.
• U.S. equities closed mixed on Monday. The Dow Jones Industrial Average added 0.24%, the S&P 500 dipped 0.25%, and the Nasdaq Composite Index dropped 1.07%, as investors analyzed weak economic readings on Wednesday. 
• The U.S. private sector saw a job slowdown, with 145,000 new jobs added in March, compared with the expected 210,000, and down from 261,000 in February. Annual pay rose 6.9% on year, down from 7.2% in the previous month, according to Automatic Data Processing Inc. The slowdown in job growth and pay was linked to weak consumer demand and the rising cost of borrowing.
• Another bearish indicator for the U.S. economy released Wednesday was the services purchasing managers’ index (PMI) for March that came in at 51.2%, according to the Institute for Supply Management, also well below expectation of 54.5%. The index is a measure of market conditions, with a lower reading suggesting a contracting economy.   
• Despite these signals, Federal Reserve Bank of Cleveland President Loretta Mester said on Wednesday interest rates may need to go higher and “hold there for some time in order to make sure inflation is on that sustainable downward path to 2%,” according to a Bloomberg report.
• Inflation as measured by the U.S. consumer price index rose by 6% on year in February, a decline from 6.4% in the previous month, but still far from the Federal Reserve’s goal to keep annual inflation below 2%.
• U.S. interest rates are now between 4.75% to 5%, the highest since June 2006. Ahead of the Federal Reserve’s meeting on May 3 to make its next move on interest rates, analysts at the CME Group are expecting a 54.2% chance of no rate hike, while 45.8% expect a 25 basis-point rise, up from 41.1% on Wednesday.
• U.S. stock futures traded lower as of 9:00 a.m. in Hong Kong. The Dow Jones Industrial Average futures dipped 0.10%, S&P 500 futures moved down 0.17% and the Nasdaq Composite Index dropped 0.31%. Investors are waiting for more data releases this week on the U.S. job market, including the Labor Department’s initial jobless claims on Thursday and U.S. employment situation summary on Friday.

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