Bitcoin Starts September with a Dip: US Stocks Weigh, Fears IntensifyFollowing the US Labor Day holiday, US stocks tumbled, with Nvidia closing down nearly 10%, marking its biggest single-day decline. Other tech stocks also saw widespread losses
Bitcoin Starts September with a Dip: US Stocks Weigh, Fears Intensify
Following the US Labor Day holiday, US stocks tumbled, with Nvidia closing down nearly 10%, marking its biggest single-day decline. Other tech stocks also saw widespread losses. Bitcoin failed to follow the US stock market's upward trajectory and recently diverged from its trajectory, currently finding support around $55,500. A break below this level could push Bitcoin closer to $52,000, with a strong support zone between $50,000 and $52,000. However, a cautious sentiment persists in the market for September.
Recent spot ETFs have shown selling pressure, with nearly 4,800 Bitcoins flowing out. If BlackRock also experiences outflows, it could signal a continuation of the downward trend. Bitcoin needs to swiftly return to $59,000, which is the buy-in price for spot ETFs and the 2024 average purchase price.
A waterfall-like decline in the crypto market, with US stocks evaporating over $1 trillion in a single day, fueled market concerns. In addition to the drag from the US stock market decline, September 4th, Blockchain Memorial Day, also contributed to today's downturn. Seven years ago on September 4th, 2017, China banned ICOs, resulting in an 80% loss in the cryptocurrency market capitalization. At that time, exchanges like Binance, OKEx, and Huobi expanded their operations overseas. Today's market crash evokes memories of that bloody historical moment.
The current total market capitalization of cryptocurrencies stands at $2.04 trillion, with Bitcoin accounting for a 56.4% market share. US stocks and gold are both trending downward, with the S&P 500, Dow Jones, and Nasdaq indices declining by 2.12%, 1.51%, and 3.26%, respectively.
Historically, September has often been a challenging month for financial markets. Traders are closely monitoring the Federal Reserve's interest rate decisions and key data points while also counting down to the US presidential election in November. Recent US economic data has rekindled recessionary fears. The August ISM Manufacturing PMI report revealed continued contraction in the US economy, with an actual value of 47.2, below the expected 47.5 and July's 46.8. New orders dropped to 44.6, while prices paid rose to 54.0.
Driven by these developments, CME's FedWatch data shows that traders have increased their odds of a 50 basis point rate cut in September from 30% to 39%, although a 25 basis point cut remains the dominant expectation at 61%. A key macroeconomic indicator will be the August employment report released on Friday. Economists predict an increase in nonfarm payrolls from 114,000 in July to 160,000, and the unemployment rate is expected to fall to 4.2%. Larry Tentarelli, Chief Technical Strategist, points out that the market is currently highly sensitive to data. With a dense week of economic data ahead, market volatility is expected to increase.
Here are key events and their potential impact on Bitcoin:
- Federal Reserve Interest Rate Decision (September 19-20): Whether the Fed cuts rates and by how much will directly impact market risk appetite and have a significant effect on Bitcoin prices.
- US Consumer Price Index (CPI) (September 13): Inflation data will influence the direction of the Federal Reserve's monetary policy, thereby impacting market risk appetite.
- US Retail Sales Data (September 14): Retail sales data reflects consumer spending patterns and will provide investors with insights into economic growth.
From a long-term perspective, Bitcoin's outlook remains optimistic. Historically, lows in hash price have often coincided with lows in Bitcoin price, suggesting the formation of a local market bottom. The low hash price sections highlighted by the purple box coincide with Bitcoin price lows, indicating that this phenomenon reflects a long-term trend rather than short-term price fluctuations. While a low hash price is a significant signal of a market bottom, similar to the situation in 2020, it suggests that the market is approaching a bottom but requires time for confirmation.
We are currently in a bull market, with turbulent conditions and heightened market volatility. Let's stay attentive to market developments and seek investment opportunities together.
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