Bitcoin, the largest cryptocurrency by market value, experienced a notable decline following the opening of the US market. This downturn is attributed largely to diminishing expectations for Federal Reserve rate cuts. Beyond the Securities and Exchange Commission’s (SEC) decision against Salt Blockchain, no significant events have been reported.
US Market Impact
At the time of writing, Bitcoin was valued at $54,500, having reached a daily low of $54,522. Analysts pointed out that the ongoing consolidation below $58,000 could lead to further declines. Despite favorable US economic data, high-volume sales pressured the bulls, who were unable to prevent the drop.
Correlation with Employment Data
Poor employment data, which has increased the likelihood of more Federal Reserve rate cuts, is now impacting US markets. Bitcoin, which often mirrors stock market trends, was also affected by this downturn. The S&P 500 fell by 1.37%, while the Nasdaq declined by 2.11%.
Factors Influencing Bitcoin’s Performance
- The global economic slowdown raises investor concerns.
- Japan’s potential for further rate hikes could affect risk markets.
- The probability of a 25 basis point Fed rate cut in September stands at 63%.
- A 50 basis point cut has a 37% probability.
These factors collectively strain the market, contributing to Bitcoin’s recent drop. Investors are closely monitoring the economic signals and their impact on cryptocurrencies.
As market dynamics evolve, stakeholders will continue to assess the interplay between economic indicators and cryptocurrency valuations.