Bitcoin’s price dropped sharply to $60,000 during a drop in stock prices worldwide. It is now slowly rising again. It tried to get back above $62,000 on August 3 when markets began to calm down, but there are still many questions.
Bitcoin’s price went up by 3% after hitting a multiweek low of $60,435 on Bitstamp, The drop was similar to a bad day for stocks worldwide, with the Nikkei average in Japan falling 6%. This made Wall Street feel bad. Investors were even more scared when job numbers in the U.S. were much worse than expected.
Bitcoin’s price dropped by almost $5,000 during this time, going through a number of important support levels like the short-term user cost base. The market saw a lot of selling. CoinGlass said crypto longs worth $230 million were erased between August 1 and August 2.
Michaël van de Poppe, founder and CEO of MNTrading, said on X (formerly Twitter), “The yields are falling off a cliff in the U.S. markets as the job reports came in shockingly bad.”
Bitcoin Bulls Await Fed Rate Cuts Amid Mixed Economic Signals
According to Van de Poppe, the Federal Reserve will likely lower interest rates at its meeting in September because of recent economic events. “One thing is certain: Rate cuts are set to happen in September,” he said.
A trading source, The Kobeissi Letter, said that the big picture of the economy was sending mixed messages. “Yesterday, people talked about whether rates would go down in September or not. In its most recent story on X, it said, “Today, people are talking about whether the rate cut will be 25 basis points or 50 basis points.”
The FedWatch Tool from CME Group showed that the market chances for a more minor 0.25% rate cut were 78% at the end of the day.
Even though the market has been unstable lately, people are still optimistic about Bitcoin. Jeff Ross, the founder and managing director of the hedge fund Vailshire Partners, said that more money flowing around the world could help the price of Bitcoin increase.
Ross showed X users a graph that showed the world M2 money supply, BTC/USD, and Bitcoin’s 50-week and 200-week simple moving averages (SMAs). “A backward head-and-shoulders pattern making up for Bitcoin (on the weekly chart) as the world’s M2 money supply rises? “Would be very bullish from both a TA and liquidity point of view,” he said.
Traders were becoming increasingly hopeful that Bitcoin would test the bottom of its long-term trading range even before the significant drop. A well-known trader named Daan Crypto Trades said, “Bitcoin has been trading in this range for more than five months.”
As Bitcoin moves through this unstable time, investors are still closely monitoring macroeconomic data. Many are betting that changes in policy and global liquidity trends will improve the environment for cryptocurrency growth.
