Here’s Why Bitcoin Price Crashed Below $54,000
07 Settembre 2024 - 10:30PM
NEWSBTC
The Bitcoin price dropped below $54,000 on September 6 as the
flagship crypto experienced a massive wave of sell-offs from
traders. This price decline was sparked by developments on the
macroeconomic side, which painted a bearish outlook for
Bitcoin. Related Reading: Cardano Bull Sees ADA Jumping
1,000% In An ‘Insane’ Rally Bitcoin Slides Following Weak Job
Report Bitcoin’s price retreated following a weak August job
report. Data from the US Bureau of Labor showed that the
unemployment rate fell to 4.2% while the labor market added 142,000
nonfarm payroll jobs. While the unemployment rate was in line with
expectations, the job additions were lower than the expected
164,000, initially estimated by market experts. This further
casts doubt on Bitcoin’s trajectory, considering how fragile the US
economy looks at the moment. This poses a threat to risk assets
like the flagship crypto. The bearish outlook for Bitcoin was
further heightened by the revisions to the July and June job
reports, which showed that the US added fewer jobs than was
initially reported in those months. Earlier, Bitcoin had
already had an unpleasant start to September, which is historically
very bearish for the leading crypto. NewsBTC reported that Bitcoin
had suffered a price crash earlier in the week due to the markets
still feeling the effects of the Yen carry trade and following
significant volatility in the US stock market, with over $1.05
million being wiped out on September 3. Macroeconomic factors
remain primarily responsible for Bitcoin’s recent bearish price
action and the broader crypto market, especially with a rate cut
from the US Federal Reserve still in the balance. It is worth
mentioning that the July job reports (the lowest job additions over
the last two years) and the Yen carry trade were responsible for
the August 5 market crash, which caused Bitcoin to drop below
$50,000. Interestingly, Arthur Hayes, the co-founder of the
BitMEX crypto exchange, stated that he expects Bitcoin to drop
below $50,000 this weekend, revealing that he had opened a short
position. A Rate Cut Looking More Unlikely For a while
now, the crypto market has been anticipating that the Fed will cut
interest rates at its next FOMC meeting, which will be held between
September 17 and 18. Bernstein analysts predicted that this move
would provide some form of bullish momentum for Bitcoin’s price.
However, a rate cut, especially by 50 basis points (bps), is now
unlikely following the release of the job data. Crypto commentator
The Kobeissi Letter highlighted in an X (formerly Twitter) post
that the odds for a 50bps have dropped to 23% on the prediction
markets. The Fed might no longer be in a hurry to cut rates since
the situation in the labor market isn’t as bad as it was initially
feared following the release of the July jobs report. Related
Reading: Aptos (APT) Dips 15% As New Innovations Fail To Spark
Momentum Whatever happens, crypto analysts like CryptoCon are
confident that the worst is almost over for Bitcoin. CryptoCon
recently noted that Bitcoin was mirroring its price action from the
2016 market cycle and suggested that the flagship crypto was
gearing up for its next leg up, which would take it to a new
all-time high (ATH). At the time of writing, Bitcoin is
trading at around $54,150, down almost 4% in the last 24 hours,
according to data from CoinMarketCap. Featured image from
EastMojo, chart from TradingView
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