The cryptocurrency space, along with most risk assets such as stocks, fell sharply on Friday amid reports of a dire state of the US economy.
However, BTC and altcoins were affected even over the weekend due to their 24/7 trading capabilities. BTC has dropped below $60,000 for the first time in weeks, raising questions about a potential stopping point.
Source: TradingView
Bitcoin's Crash: When Will It End?
Less than a week ago, on Monday, the largest cryptocurrency skyrocketed to $70,000 for the first time since early June. The rally came on the heels of Donald Trump's pro-Bitcoin speech at the convention BTC Conference 2024 in Nashville.
However, the asset could not maintain its upward momentum and fell four thousand dollars on the same day. The backdrop worsened over the weekend and the asset fell to $62,200 on Friday after the US released its July jobs report, which highlighted the unemployment rate rising to its highest level in 3 years.
Wall Street also collapsed, but BTC continued to lose value throughout the weekend because it never stopped trading. This culminated earlier today with the price falling below $60,000, marking a new 3-week low.
According to the popular AI chatbot Perplexity, BTC's decline could continue over the next few weeks. In fact, BTC could end up falling into the “mid- or low-$50,000 price range if the current decline continues.”
Furthermore, Perplexity outlined another bearish scenario in which BTC could drop to between $40,000 and $50,000 “if it follows the patterns seen in previous bull markets, when one occurs significant retracements”.
What causes prices to drop?
Perplexity outlined several reasons why BTC dropped over the past week. First, they focused on outflows from Bitcoin-related investment financial instruments, such as US-based ETFs. Friday was a particularly negative day with more than $230 million flowing out of the largest ETFs.
Additionally, the AI chatbot mentioned a “lack of bullish momentum” as BTC has fallen below key support levels, such as $62,000, but has so far held above the psychological $60,000 level. la despite a previous rapid decline. However, a decisive break below this level could exacerbate the decline.
“Market analysts have noted general nervousness among investors, especially in light of upcoming economic indicators that could affect US Federal Reserve policy,” Perplexity conclude.
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