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The Bitcoin price fell below $54,000 on September 6, when the flagship crypto experienced a massive wave of sell-off by traders. This price drop was fueled by developments in the market macroeconomic sidewhich painted a bearish outlook for Bitcoin.
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Bitcoin Drops After Weak Jobs Report
Bitcoin’s price pulled back after a weak jobs report in August. Facts from the US Bureau of Labor showed that the unemployment rate fell to 4.2%, while the labor market added 142,000 non-farm payroll jobs. Although the unemployment rate was in line with expectations, new jobs were lower than the expected 164,000 initially estimated by market experts.
This casts further doubt on Bitcoin’s trajectory given its fragility American economy looks at the moment. This poses a threat to risky assets like the flagship crypto. The bearish outlook for Bitcoin was further strengthened by the revisions to the July and June jobs reports, which showed that the US created fewer jobs than initially reported in those months.
Previously, Bitcoin 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 this week as markets were still feeling the effects Yen executes trade and after significant volatility in the US stock market, with more than $1.05 million wiped out on September 3.
Macroeconomic factors remain primarily responsible for Bitcoin and the broader crypto market’s recent bearish price action, especially with a US Federal Reserve interest rate cut still on the cards. It’s worth noting that the July jobs reports (the lowest new job growth in the past two years) and the carry trade in the yen were responsible for the August 5 market crashcausing Bitcoin to fall below $50,000.
Interestingly, Arthur Hayes, the co-founder of the BitMEX crypto exchange, declared that he expects Bitcoin to fall below $50,000 this weekend, showing that he has opened a short position.
An interest rate cut seems more unlikely
The crypto market has been expecting for some time that the Fed will lower interest rates with the next interest rate cut FOMC meetingwhich will be held between September 17 and 18. Bernstein Analysts predicted that this move would create 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 jobs figures.
Crypto commentator The Kobeissi letter marked in an X (formerly Twitter) after that the odds of a 50bps in the prediction markets have fallen to 23%. The Fed may no longer be in a hurry to cut rates, as the labor market situation is not as bad as initially feared following the release of the July jobs report.
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Whatever happens, crypto analysts like CryptoCon are convinced that the worst for Bitcoin is almost over. CryptoCon recently noted that Bitcoin reflected its price action from the 2016 market cycle and suggested that the flagship crypto was gearing up for its next move higher that would take it to a new level. all-time high (ATH).
At the time of writing, Bitcoin is trading around $54,150, down almost 4% in the past 24 hours. facts from CoinMarketCap.
Featured image from EastMojo, chart from TradingView