Bitcoin fell below $54,000 September 6, 2024, after previously rising to $57,000 following U.S. nonfarm payroll data. The report showed the economy added only 142,000 jobs in August, which was well below expectations and sent the cryptocurrency market into volatility.
The sudden turnaround left the cryptocurrency ecology stunned. After reaching a low of $53,780, Bitcoin down about 4% in the past 24 hours and traded at $54,101. The gloomy job count was followed by speculation about Federal Reserve rate cuts, with estimates of a 70% probability of a 25 basis point decline at the next FOMC meeting on September 18.
BTC down in the last 24 hours. Source: Coingecko
Altcoins also in the red
The liquidation wasn’t unique to bitcoin. Major altcoins also fell: ether fell 4.6% in the past 24 hours, changing hands at $2,261. Others that saw significant losses included Ripple’s XRP and DOGE, each down more than 4%.
Liquidations and market turmoil
The wild price swings caused gigantic liquidations in the cryptocurrency market, with some reports suggesting that around $93 million was liquidated in four hours. These liquidations largely involved long leveraged positions, surprising traders who had been expecting further growth.
BTC market cap currently at $1.07 trillion. Chart: TradingView.com
A potential Fed rate cut is coming
The bleak jobs figure has raised speculation about upcoming interest rate action, with some investors now expecting possibility of interest rate cutswith a 70 percent probability of a 25 bp cut at the next FOMC meeting on September 18.
“Ultimately, the nature of the cut — bullish or bearish — depends on the economic data and the Fed’s commentary, but assuming everything else remains unchanged, 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 better for risk assets, since a 50-basis-point cut could suggest the Fed is starting to worry about a U.S. recession. The nature of the cut will depend on economic data and Fed commentary.
Bitcoin: Bearish Pressure Remains Low
Although the broader market is in decline, data shows that bearish pressure on Bitcoin remains low. This indicates that the current bearish momentum may be due to non-aggressive selling pressure.
Although it failed to keep Bitcoin’s value above $54,000 after US Employment Report sheds lithe on some volatility in the cryptocurrency market, a possible interest rate cut by the central bank has increased uncertainty and left market participants watching closely for the Federal Reserve’s next moves.
Like all other cryptocurrencies, altcoins have also been beaten and have fallen below their key resistance levels, while the broader cryptocurrency market has pulled back. According to analysts, the bearish pressure may not be as earnest as it seems.
Featured image from Pexels, chart from TradingView
