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The Bitcoin price dropped below $54,000 on September 6 because the flagship crypto experienced an enormous wave of sell-offs from traders. This price decline was sparked by developments on the macroeconomic side, which painted a bearish outlook for Bitcoin.
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Bitcoin Slides Following Weak Job Report
Bitcoin’s price retreated following a weak August job report. Data from the US Bureau of Labor showed that the unemployment rate fell to 4.2% while the labor market added 142,000 nonfarm payroll jobs. While the unemployment rate was in keeping with expectations, the job additions were lower than the expected 164,000, initially estimated by market experts.
This further casts doubt on Bitcoin’s trajectory, considering how fragile the US economy looks in the mean time. This poses a threat to risk assets just like the flagship crypto. The bearish outlook for Bitcoin was further heightened by the revisions to the July and June job reports, which showed that the US added fewer jobs than was initially reported in those months.
Earlier, Bitcoin had already had an unpleasant begin to September, which is historically very bearish for the leading crypto. NewsBTC reported that Bitcoin had suffered a price crash earlier within the week as a consequence of the markets still feeling the consequences of the Yen carry trade and following significant volatility within the US stock market, with over $1.05 million being worn out on September 3.
Macroeconomic aspects remain primarily accountable for Bitcoin’s recent bearish price motion and the broader crypto market, especially with a rate cut from the US Federal Reserve still within the balance. It’s price mentioning that the July job reports (the bottom job additions over the past two years) and the Yen carry trade were accountable for the August 5 market crash, which caused Bitcoin to drop below $50,000.
Interestingly, Arthur Hayes, the co-founder of the BitMEX crypto exchange, stated that he expects Bitcoin to drop below $50,000 this weekend, revealing that he had opened a brief position.
Bitcoin is currently trading at $54,227. Chart: TradingView
A Rate Cut Looking More Unlikely
For some time now, the crypto market has been anticipating that the Fed will cut rates of interest at its next FOMC meeting, which can be held between September 17 and 18. Bernstein analysts predicted that this move would supply some type of bullish momentum for Bitcoin’s price. Nonetheless, a rate cut, especially by 50 basis points (bps), is now unlikely following the discharge of the job data.
Crypto commentator The Kobeissi Letter highlighted in an X (formerly Twitter) post that the chances for a 50bps have dropped to 23% on the prediction markets. The Fed might now not be in a rush to chop rates because the situation within the labor market isn’t as bad because it was initially feared following the discharge of the July jobs report.
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Whatever happens, crypto analysts like CryptoCon are confident that the worst is sort of over for Bitcoin. CryptoCon recently noted that Bitcoin was mirroring its price motion from the 2016 market cycle and suggested that the flagship crypto was gearing up for its next leg up, which might take it to a latest all-time high (ATH).
On the time of writing, Bitcoin is trading at around $54,150, down almost 4% within the last 24 hours, in accordance with data from CoinMarketCap.
Featured image from EastMojo, chart from TradingView