Bitcoin Price Drops

Bitcoin, the largest cryptocurrency by market value, plummeted to a low of $55,555 in early trading on Wednesday, continuing Tuesday’s losses.

Economic Concerns

The signs of economic weakness in the United States and China have unsettled investors, worsening the global market’s worst period since the drop on August 5. This bearish sentiment has impacted cryptocurrencies, as traders await a U.S. jobs report on Friday to gauge potential economic slowdown.

Market Reaction

As a result of the broader market retreat from riskier investments, Bitcoin fell to a one-month low, with other major cryptocurrencies also experiencing declines.

At the time of writing, several cryptocurrencies such as XRP, Shiba Inu (SHIB), and Cardano (ADA) reported losses of 2.79%, 2.64%, and 1.79%, respectively. Bitcoin recorded larger losses, down 3.86% in the last 24 hours, trading at $56,671.

Crypto Market Outlook

In a recent note, Fairlead Strategies LLC technical analyst Katie Stockton expressed a “long-term neutral bias” toward Bitcoin. The aggregate open interest for CME Bitcoin futures has dropped to its lowest level since May, indicating market concern. Additionally, U.S. Bitcoin exchange-traded funds have seen their longest stretch of net outflows since June, according to Bloomberg.

Historically, the short-term outlook remains challenging. September is generally viewed as a pessimistic month for cryptocurrencies, with Bitcoin averaging an 8% loss in value over the last five years through September 2023.

The Federal Reserve’s next meeting is set for later this month, where it will announce its latest interest rate decision. Markets are largely anticipating a rate decrease, though there is uncertainty regarding the magnitude of the cut.

This article was originally published on U.Today