Bitcoin Price Faces Fresh Decline
Bitcoin (BTC) dropped below $57,000 on Thursday, reversing gains from the previous day. The leading cryptocurrency fell over 2% to $56,700. It struggled to hold above $58,000 on Wednesday. Prices had peaked above $65,000 on August 25 but have been on a downward trend since. This decline in Bitcoin price has been marked by brief, shallow rallies, reflecting a persistent “sell-on-rise” sentiment.
Other Cryptocurrencies Follow Suit
Most other cryptocurrencies, including ether (ETH), XRP, and TON, also erased their previous gains. These assets traded largely unchanged on a 24-hour basis. According to recent data, the CoinDesk 20 Index (CD20), which tracks the broader crypto market, was up 0.9%. The overall market reaction indicates that investor sentiment remains cautious.
Economic Concerns Weigh on Bitcoin
The recent drop in Bitcoin’s price is likely due to growing concerns about the U.S. economy. Analysts are increasingly worried about the potential for a recession. Valentin Fournier, an analyst at BRN, highlighted this sentiment. “Economic reports suggest that the risk of a recession should not be ignored,” Fournier said. The ISM manufacturing index fell 0.5% below expectations. Additionally, job openings are at 7.7 million, missing the forecast of 8.1 million.
Economic Data Adds to Market Uncertainty
The U.S. Bureau of Labor Statistics published the Job Openings and Labor Turnover Survey (JOLTS) on Wednesday. The data showed 7.67 million job openings on the last business day of July. This figure fell short of the market expectation of 8.1 million and was weaker than the revised June figure of 7.9 million. Additionally, the Federal Reserve’s Beige Book indicated a “slowing, slackening labor market,” according to Julia Pollak, chief economist at ZipRecruiter.
Federal Reserve Rate Cut Bets Intensify
Weak economic data has increased expectations for Federal Reserve interest-rate cuts. However, this anticipation has not yet stabilized Bitcoin’s price. Alex Kuptsikevich, senior market analyst at The FxPro, noted that Bitcoin’s weakness could signal broader market issues. “The weakness in cryptocurrencies might reflect a limited risk appetite that could affect traditional assets,” Kuptsikevich said.
Ongoing Bitcoin Price Decline and Market Sentiment
Bitcoin is down for the ninth day out of the last 11. Its recent attempt to consolidate above the 200-day average has triggered a heightened sell-off. This pattern has continued into Thursday morning, with the price testing lows not seen in the last four months. Kuptsikevich emphasized the potential impact on other markets, stating, “Bitcoin’s current weakness could influence traditional risk assets, signaling broader market shifts.”
Chart by Trading View
Source: CoinDesk
