• The CD20 index is down 7% and BTC is in the red 5%.

• Uncertainty over interest rates is likely dragging on the market.

The CoinDesk 20 (CD20), a measure of the largest digital assets, began the Asia trading week down 7%, while bitcoin traded 5% lower amid increased expectations for Fed rate cut in September.

Nearly every constituent in the CD20 is in the red, posting bigger losses than bitcoin. Ether (ETH) is down 5.8%, Solana (SOL) down 7.8%, and XRP down 7%. CoinGlass data shows there has been $175 million in long liquidations over the last 24 hours.

BTC has been down 13% in the last week, which puts it in similar territory to the aftermath of the FTX collapse.

Stronger than expected U.S. jobs data, but a rising unemployment rate has penciled in a Fed rate cut for September, according to a recent note by ING.

ING's James Knightley wrote that private sector job growth has been particularly weak, with only 136,000 new jobs added in June, below the 160,000 expected. Government, education, and healthcare services contributed nearly 60% of new jobs, while retail, temporary help, professional business services, and manufacturing all saw job losses.

Citi Research is making a more aggressive prediction, writing in a recent note that it is forecasting eight Federal Reserve rate cuts starting in September 2024 through July 2025, lowering the benchmark rate by 200 basis points to 3.25%- 3.5%.

Bettors on Polymarket are punting that the Fed will have 1-2 rate cuts by the end of the year, with a 34% chance of 1 cut and a 37% chance of 2.

The so-called dovish Fed expectations also failed to lift Asian stocks as the European Union's decision to impose steep tariffs on the import of Chinese electric vehicles soured the sentiment. Elsewhere, French voters gave leftists more seats than far right but failed to secure a majority, leaving a potentially hung parliament, a recipe for political and policy paralysis and potential risk aversion in European markets.