Bitcoin and crypto—including top ten coins ethereum, BNB, Solana, XRP and Dogecoin—have crashed after a serious Goldman Sachs warning.
The bitcoin price has dropped towards $53,000 per bitcoin, with the combined crypto market plunging under the $2 trillion level as fears swirl the U.S. dollar is on “the verge of a total collapse.”
Bitcoin prices took a tumble today, falling close to 8% in less than 24 hours as markets responded to several bearish variables including lackluster jobs data.
The world’s most prominent digital currency dropped to $52,530 around 5 p.m. EST, according to Coinbase data provided by TradingView.
At this point, the cryptocurrency was down approximately 7.8% after rising to nearly $57,000 earlier in the day, additional Coinbase figures pulled from the same source reveal.
Since falling to roughly $52,500, the digital asset has bounced back somewhat, trading close to $53,800 at the time of this writing. However, the cryptocurrency has failed to recoup most of the losses it suffered today.
Now, after Coinbase’s chief executive last week revealed an AI game-changer, bitcoin and crypto market sentiment has swung to “extreme fear” as the market digests the latest U.S. jobs data that missed expectations, driving the bitcoin price below a key resistance level.
“A key technical support level for the bitcoin price remains just above $54,000, but slippage in the event of a volatility spike could see the price briefly drop below $53,000, Alex Kuptsikevich, FxPro senior market analyst, said.
Earlier this week, legendary bitcoin trader Arthur Hayes and analysts with Bitfinex predicted the bitcoin price could fall much further in the short term.
The Crypto Fear & Greed Index, a measure of crypto market sentiment, has sunk to a one-month low of 22, a sign of “extreme fear” and a level last seen during the August market meltdown.
The bitcoin price fell to just over $52,000 before rebounding back above $53,000. The rest of the crypto top ten has crashed back along side the bitcoin price, with ethereum, BNB, solana, XRP and dogecoin each losing between 5% and 10% over the last 24 hours.
The bitcoin price crash comes as U.S. jobs data showed the economy added 142,000 new jobs in August, short on economists forecasts of around 161,000.
The slowing jobs market has fueled fears the Federal Reserve has waited too long to cut interest rates, with the economy at risk of falling into recession.
However, others think the looming Fed interest rate cut—widely expected to kick off a rate-cutting cycle—could be a bullish catalyst for the bitcoin price and wider crypto market.
“The recent U.S. labor market results acted as a moment of truth for risk-on assets like bitcoin, as the labor market is considered the main sector that may influence the Fed’s decision to cut rates this month,” Leena ElDeeb, research analyst at 21Shares, said in emailed comments.
“With a slightly improving unemployment rate, investors traded positively, pricing in a looser monetary policy on September 18. A rate cut bodes well for risk-on assets which have historically enjoyed the expansion of the investor appetite as borrowing costs decrease. If a hard economic landing is avoided, bitcoin and the broader market may see appreciation in the fourth quarter, driven by these liquidity dynamics.”
All Eyes On The Fed
In spite of the bearish impact today’s jobs data had on bitcoin, the figures could cause Fed officials “to be much more dovish and lower rates this month,” Sifling stated, emphasizing the frequently repeated sentiment that “Lower rates have historically been seen as a positive development for Bitcoin.”
Several other market observers highlighted how the lackluster jobs figures could potentially impact the decision making of these government officials.
Tim Enneking, managing partner of Psalion, stating that “the cuts will almost certainly total 75-100 bps this year (which is quite rapid) and the US (and global) economy looks to be set for a soft landing.”
Recently, the cryptocurrency markets have been impacted by the specific time of the year, Joseph emphasized, stating that “the seasonality effects in the summer have slowed down the inflow of capital to the ETFs, leading to a lack of fresh capital to support Bitcoin’s price.”
Over the next several weeks, the digital asset could experience further weakness, at least if bitcoin experiences performance this September that is similar to previous years.
“Historically, since 2010, Bitcoin’s average returns in September have averaged -4.51%, making it the worst-performing month on record, contributing to negative expectations,” the analyst noted.
“Moreover, the market is more likely to be risk averse entering a period of catalysts that can induce high volatility; with the US Presidential Election debate on Sept 10th, CPI and FOMC decision on the 12th and 20th,” he added.
