2024-08-06 08:03:44
The Bitcoin price fell to its lowest level since February on Monday. The reason is fears of a recession and weak US labor market data. How low can it go?
Bitcoin continued to lose ground on Monday, amid a generally gloomy mood on the financial markets. The price of the oldest and best-known cryptocurrency fell to $51,600 in the morning, reaching its lowest level since February. Bitcoin has lost about $10,000 in value since Friday evening.
With Monday’s loss, the Bitcoin price has also fallen back to the level of late February, after climbing to a record high of almost $74,000 in mid-March. “Falling below the 20-day and 50-day lines is a sign of weakness,” analyzes stock expert Achim Mautz from Lynx Broker.
If the defense of the level at around 52,000 to 53,000 US dollars fails, it could go one level lower, Mautz explains. The next largest support zone, to which it could continue to fall, is at around 38,500 dollars. It remains to be seen whether it will actually go down that much. “The fact is that the risk of further declines is immensely high,” says the stock expert.
The last time there was a similarly sharp drop in price was in June 2022. Bitcoin had already fallen sharply last week. Analyst Timo Emden of Emden-Research spoke of a “cocktail of uncertainty” that is currently weighing on Bitcoin. In particular, the renewed fears of recession in the USA caught investors off guard, said Emden. “Anything that has to do with risk is avoided in such moments.”
Video | Stock markets continue to decline – fear of recession grows
There have been a number of disappointing economic data releases in the USA recently. The unexpectedly weak labor market report from the US government in particular caused concern. In July, unemployment in the world’s largest economy rose to its highest level in almost three years.
In addition to Bitcoin, other cryptocurrencies were also under strong selling pressure at the beginning of the week. Ethereum’s price fell by around 33 percent to $2,400 (around €2,030) on a weekly basis. Solana’s price fell by around 38 percent during this period. Litecoin and Cardano lost around 15 percent.
With the recent price losses, the market capitalization of all cryptocurrencies has decreased significantly. It fell by about 14 percent to 1.85 trillion dollars. Bitcoin’s share was recently estimated at about 56 percent.
A week ago, the Bitcoin price had risen to just under $70,000. Statements by Republican presidential candidate Donald Trump had pushed the cryptocurrency towards a record high, last reached in March at just under $74,000. Trump had promised to make the USA the “crypto capital of the planet and the Bitcoin superpower” if he returned to the White House after the election in November.
Last week’s price development once again underlines the high volatility of the cryptocurrency market. Experts continue to warn of possible significant price losses for Bitcoin and other digital currencies.