Ethereum News Today: Bitcoin Stalls as Rate Cut Hopes Fade; Ethereum’s Earnings Under Fire

Bitcoin's price remains confined to a narrow range near $110,000, as traders await the U.S. Federal Reserve’s upcoming interest rate decision on September 17. Recent nonfarm payroll data, which showed an addition of only 22,000 jobs in August—well below the expected 75,000—has intensified speculation about a rate cut. According to the CME FedWatch Tool, there is a 100% probability of a rate reduction, with a 90% chance of a 25-basis-point cut and a 10% possibility of a 50-basis-point cut [1]. Analysts suggest that while a cut could provide some support for risk assets like bitcoin, the market has already priced in much of the expected easing, and the absence of strong ETF inflows has limited upward momentum [1].

The weak jobs data reinforces expectations of a dovish Federal Reserve, which is typically bullish for risk assets. However, the current consolidation in bitcoin is attributed to institutional profit-taking and relatively flat ETF flows [1]. Rachael Lucas, a crypto analyst at BTC Markets, explained that these factors are tempering the immediate price response, even as the broader macroeconomic environment suggests easing monetary policy [1]. Vincent Liu of Kronos Research added that any rate cut could reflect underlying economic weakness, which might deter aggressive risk-taking, particularly in the absence of strong liquidity expansion [1].

Meanwhile, Ethereum's financial fundamentals have come under scrutiny, as its network revenue and fees declined by 44% and 20%, respectively, in August, despite ETH reaching an all-time high of $4,957 on August 24 [2]. The drop in revenue—defined as the share of network fees that accrue to ETH holders through token burns—has sparked debate over the long-term sustainability of Ethereum’s financial model [2]. Critics argue that the network’s profitability has been eroded by the March 2024 Dencun upgrade, which significantly reduced transaction costs on layer-2 scaling solutions built on Ethereum [2].

Ethereum’s underperformance has contrasted with the strong weekly performance of Bitcoin Cash (BCH), which rose 10% to trade above $602 [3]. Traders appear to be rotating capital into smaller, Bitcoin-adjacent assets as BTC struggles to break above key resistance levels near $120,000. Ethereum, in particular, has seen selling pressure following a Nasdaq ruling that restricts corporate purchases of cryptocurrency, further dampening sentiment around institutional ETF inflows [3]. Chainlink (LINK) also faced a 5.8% decline over the past week after a surge driven by government data partnerships faded [3].

As the market remains in a state of cautious optimism, analysts highlight key indicators to monitor. On-chain metrics such as stablecoin supply and declining exchange balances for BTC and ETH suggest potential for future rallies, while regulatory developments—particularly those involving the SEC and CFTC—could shape sentiment in the coming months [1]. Off-chain, the performance of Ethereum treasury companies and the broader institutional appetite for staking ETH are seen as critical factors influencing long-term market dynamics [2].

Source:

[1] The Block: Bitcoin stalls around $110000; Fed rate cut may not spark ... (https://www.theblock.co/post/369743/bitcoin-rate-cut-may-not-spark-rally)

[2] Cointelegraph: Ethereum revenue drops 44 percent in August amid all-time high (https://cointelegraph.com/news/ethereum-revenue-drops-44-percent-august-all-time-high)

[3] Yahoo Finance: Bitcoin Cash (BCH) Emerges Top Crypto Gainer as Ethereum and Chainlink Emerge Top Losers (https://finance.yahoo.com/news/bitcoin-cash-bch-emerges-top-213243634.html)