Cash News
Bitcoin (BTC-USD) crashed below the $50K mark amid a global selloff sparked by recession fears in the U.S. pushing stock markets around the world into the red. Crypto related stocks were also down.
The world’s oldest cryptocurrency plunged 15% in intraday trading, but regained some ground later as it climbed to $52K. Ether (ETH-USD) also fell 19% at one point.
BTC slid after a disappointing July jobs report stoked fears that the U.S. economy is headed toward a recession and the Federal Reserve is behind the curve in cutting interest rates.
“The bearish macro data in the U.S. sent investors worrying about a possible recession. Despite no formal confirmation of a rate cut by the Fed in Sept., the market has priced in the event and we should expect a rebound in BTC price when the macro environment improves,” said Lucy Hu, senior analyst, Metalpha.
Rising geopolitical tensions are also adding to the risk-off sentiment. President Biden is meeting with his national security team in the situation room ahead of an anticipated Iranian attack against Israel.
Japan markets also had a turbulent start to the week, with the Nikkei 225 Index (NKY:IND) plunging 13.2% for its worst session since the 2011 Fukushima nuclear meltdown.
“The recent pullback resulted from the broader market tightening in Japan’s economic policies, where the central bank’s hawkish stance shifted to surprisingly raise interest rates,” Hu added.
The cryptocurrency had also witnessed a 13% drop last week, with the major fall coming on Friday after the jobs report.
“The recent market drop was caused by a combination of factors. The latest rise in the unemployment rate pretty much triggered the recently popular “Sahm recession indicator”, though we think the move is overdone and the US economy is not about to enter a recession,” said Augustine Fan, head of insights, SOFA.org
“In crypto, we feel this level could offer a good buying opportunity as well with global CBs likely to re-enter a monetary easing path, and the longer positives of a more constructive yield narrative will eventually overcome the short-term pressures for positioning unwinds,” Fan added.
Crypto-linked stocks also fell in premarket trade, with Marathon Digital (MARA) -14.1%Bitfarms (BITF) -10.6%Coinbase (COIN) -13.3%CleanSpark (CLSK) -17.7%MicroStrategy (MSTR) -17.1% and Riot Platforms (RIOT) -12.3%.