Bitcoin fell below $54,000 on September 6, 2024, after earlier in the day rising to $57,000 following the release of US nonfarm payrolls. The report showed the economy added just 142,000 jobs in August, which was well below expectations and threw the cryptocurrency market into volatility.
The abrupt U-turn sent the cryptocurrency ecology into a tailspin. After hitting a low of $53,780, Bitcoin lost approximately 4% Over the past 24 hours, the dollar was trading at $54.101. Following the disappointing job count, there was talk of interest rate cuts by the Federal Reserve; there is an estimated 70% chance of a 25 basis point cut at the next FOMC meeting on September 18.
BTC down in the last 24 hours. Source: Coingecko
Altcoins are also in the red
The sell-off was not exclusive to Bitcoin. Major altcoins also fell: Ether fell 4.6% over the past 24 hours and was trading at $2,261. Other cryptocurrencies with notable losses were Ripple’s XRP and DOGE, each down more than 4%.
Liquidations and market turbulence
The sharp price swings triggered heavy liquidations in the cryptocurrency market. According to some reports, around $93 million was liquidated in a four-hour period. These liquidations largely corresponded to leveraged long positions, which took traders by surprise, who were expecting a new rally.
BTC market cap currently at $1.07 trillion. Chart: TradingView.com
A possible Federal Reserve rate cut is looming
The disappointing jobs figure has sparked speculation about upcoming interest rate moves. Some investors now expect Possibility of rate cutswith a 70% chance of a 25 basis point cut at the next FOMC meeting on September 18.
“Ultimately, the nature of the cut, whether bullish or bearish, depends on economic data and Fed commentary, but all things being equal, I still believe 25 basis points is better for asset prices than 50 basis points,” said Sean Farrell, head of digital asset research at Fundstrat.
A smaller cut would be more supportive for risk assets, as a 50 basis point cut could suggest that the Fed is starting to worry about a recession in the US economy. The nature of the cut will depend on economic data and comments from the Fed.
Bitcoin: Bearish pressure remains low
Although the overall market is in decline, data shows that the bearish pressure on Bitcoin remains low. This is indicative that the current bearish momentum could be due to lackluster selling pressure.
While Bitcoin’s failure to stay above $54,000 after the US employment report Bringing to light some volatility in the cryptocurrency market, a possible central bank rate cut increased uncertainty and made market participants keep a close eye on the Fed’s next move.
Just like all other cryptocurrencies, altcoins also took a hit and fell below their key resistance levels, causing the broader cryptocurrency market to pull back. According to analysts, the bearish pressure might not be as severe as it seems.
Featured image from Pexels, chart from TradingView
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