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

Signs of economic weakness in the United States and China are unsettling investors, exacerbating the worst period for global markets since the Aug. 5 fall. The bearishness has spread to cryptocurrency, with traders waiting for a U.S. jobs report on Friday to see if a deeper slowdown is on the way.

Amid a wider retreat from riskier investments on global markets due to fears about the economic outlook, Bitcoin consequently tumbled to a one-month low, with other major cryptocurrencies sustaining losses.

At the time of writing, several cryptocurrencies were trading in the red. XRP, Shiba Inu (SHIB) and Cardano (ADA) were nursing losses of 2.79%, 2.64% and 1.79%, respectively.

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Bitcoin was sustaining larger losses, down 3.86% in the last 24 hours to $56,671 at the time of writing.

Crypto market outlook

In a recent research note, Fairlead Strategies LLC technical analyst Katie Stockton expressed a "long-term neutral bias" toward Bitcoin.

The aggregate open interest — or outstanding contracts — for CME Bitcoin futures has fallen to its lowest level since May, signaling market concern. Meanwhile, U.S. Bitcoin exchange-traded funds have experienced the longest period of net outflows since June, according to Bloomberg statistics.

If history is any guide, the short-term outlook remains challenging. September is traditionally considered a gloomy month for cryptocurrencies. According to historical statistics, Bitcoin has had an average September loss of value of 8% during the last five years, ending in 2023.

The Fed's next meeting is scheduled for later this month, when it will release its latest rate decision. Markets are broadly pricing in a rate drop from the central bank, but traders are divided on how significant the cut will be.