Author: BitpushNews
The "September curse" continued to hang over the financial markets, with U.S. stocks and crypto markets struggling on Wednesday.
Data from the Bureau of Labor Statistics' Job Openings and Labor Turnover Survey showed U.S. job openings fell to 7.67 million in July from a downwardly revised 7.91 million in the previous month, a number that fell short of all economists' expectations. Job openings fell to their lowest level since early 2021 in July, and layoffs increased, consistent with signs of a slowdown in demand for other workers.
After the data was released, the Chicago Mercantile Exchange's FED WATCH tool showed that the market currently expects a 49% chance of a 50 basis point rate cut by the Federal Reserve on September 18. In addition, the U.S. 2-year/10-year Treasury yield curve turned positive for the second time since 2022, exacerbating investors' concerns about a U.S. recession.
As for U.S. stocks, as of the close of the day, the S&P index and Nasdaq index fell 0.16% and 0.30% respectively, while the Dow Jones index rose 0.09%.
According to Bitpush data, Bitcoin fell below the $56,000 support level in the early hours of Wednesday, hitting an intraday low of $55,567, before bulls pushed it back above $58,000. As of press time, BTC is trading at $58,010, down 0.25% in 24 hours.
Altcoins had mixed performances, with 1inch Network (1INCH) leading the gains among the top 200 tokens by market cap, up 21.6%, followed by Aave (AAVE) and GMT (GMT), up 11.9% and 11.6%, respectively. Sun (SUN) led the decline, down 9.2%, while Flux (FLUX) fell 8.5% and Toncoin (TON) fell 7.4%.
Currently, the total cryptocurrency market cap is $2.03 trillion, and Bitcoin’s dominance rate is 56.5%.
"Difficult to find direction"
“A bullish divergence has been forming on the RSI since last week, suggesting that selling pressure may be waning,” Secure Digital Markets analysts said in a report. “Despite these short-term signals, long-term technical indicators remain unclear, with Bitcoin still in the middle of a long-term descending channel with no clear direction.”
Market analyst Bloodgood warned that this weakness could continue for some time and could cause Bitcoin to fall below $50,000.
“The pullback in Bitcoin continues, last week we discussed how the accumulation zone looked weak and we saw a breakout of that level before the end of the week,” Bloodgood said in the latest market update. “A break below the accumulation zone could confirm our theory that new lows are possible. If that is the case, then $46,700 is just around the corner and some bids around this level could be wise. This theory would be invalidated if bulls manage to push Bitcoin back above the breakout zone around $59,000.”
In addition to the correlation between the performance of assets such as Bitcoin and technology stocks, Bloodgood said that the real driver of the market is still the Federal Reserve.
He pointed out that the recent pullback in tech upstart Nvidia led the market down, and the crypto market followed this trend, but this will not change the long-term outlook for cryptocurrencies. He added: "What is more important is how the Fed and the Treasury will act to stabilize the stock market and keep bond yields at acceptable levels. Given that the election is approaching, they will act as soon as possible. The Fed cut interest rates earlier than expected, which is why the main goal for most people should be not to be scared off by volatility during this period."
While investors are eagerly awaiting the first rate cut, crypto data analyst Brett on the X platform reminded users that historical data shows that rate cuts are often accompanied by sharp declines in stock prices, and there is no reason to think this time will be different.
He analyzed on Twitter: "We are 15 days away from the first rate cut of this round by the Fed. Using the same time frame, I superimposed the following past rate cut cycles: 1981, 1990, 2000 and 2007. These four rate cut cycles match the data we are currently seeing (rising unemployment, 10-year 2-year inversion, etc.). The bulls' view is that rate cuts are suitable for the market, which is true in the long run... But history shows that the market will rise for an average of 25 days after a rate cut, followed by an average of 13 months of selling."
