On September 6, 2024, Bitcoin’s price fell below $54,000, a sharp decline from its earlier high of $57,000. This market reaction followed the release of the US nonfarm payrolls report, which revealed that the economy added only 142,000 jobs in August—well below expectations. The disappointing job numbers introduced significant volatility into the cryptocurrency market.
The sudden downturn sent shockwaves through the crypto ecosystem. Bitcoin hit a low of $53,780, experiencing a roughly 4% drop within 24 hours, and was trading at $54,101 at the time of reporting. The poor job data led to speculation about potential Federal Reserve interest rate cuts, with a 70% probability estimated for a 25 basis-point reduction at the upcoming FOMC meeting on September 18.
Altcoins Also In The Red
The downturn wasn’t confined to Bitcoin alone. Major altcoins also faced significant losses. Ether saw a 4.6% decline over the past 24 hours, trading at $2,261. Ripple’s XRP and DOGE similarly suffered, each dropping by more than 4%.
Liquidations And Market Turbulence
The erratic price movements led to substantial liquidations within the crypto market. Reports indicate that approximately $93 million were liquidated within a four-hour period. These liquidations were predominantly from leveraged longs, catching traders off guard who had anticipated a continued rally.
Potential Fed Rate Cut Looms
The weak job numbers have fueled speculation about imminent interest rate adjustments. Many investors now foresee the possibility of rate cuts, with a 70% likelihood of a 25 basis-point reduction at the next FOMC meeting on September 18. Sean Farrell, Head of Digital Asset Research at Fundstrat, commented, “Ultimately, the nature of the cut—whether bullish or bearish—depends on economic data and Fed commentary, but all things being equal, I still view 25 bps as better for asset prices than 50 bps.”
A smaller cut would be more advantageous for risk assets, as a 50bp cut could imply that the Fed is increasingly concerned about a potential recession in the US economy. The decision will ultimately depend on ongoing economic data and Federal Reserve commentary.
Bitcoin: Bearish Pressure Remains Low
Despite the broader market decline, data suggests that bearish pressure on Bitcoin remains relatively low. This indicates that the current bearish momentum might be driven by modest selling pressure rather than aggressive dumping.
The inability of Bitcoin to maintain its position above $54,000 following the US jobs report underscores the volatility in the cryptocurrency market. The potential for a central bank rate cut has further heightened uncertainty, leading market participants to closely monitor the Fed’s next moves.
Alongside Bitcoin, altcoins have experienced significant losses, falling below key resistance levels and contributing to the broader market retreat. However, analysts suggest that the bearish pressure may not be as severe as it appears.
