3 reasons why bitcoin is falling so badly.
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Bitcoin prices fell today, largely due to concerns about the economy and upcoming U.S. jobs data. As of September 4, BTC was down 3.3%, trading at around $55,600, marking a one-month low. The drop mirrors a broader sell-off in risk assets, such as the S&P 500, due to growing fears of a recession.
1. Recession Fears Affect Bitcoin and Stocks
The drop comes as traders prepare for key U.S. jobs data, which is expected to show a slowing labor market. This follows other indicators such as manufacturing activity falling, raising concerns about economic growth rather than inflation. The cooling labor market is adding to market anxiety, leading to large outflows from Bitcoin ETFs—$287.80 million in daily outflows, the longest streak since June.
2. Bitcoin Futures Market Signals Caution
Open interest (OI) in Bitcoin futures has fallen from $37.5 billion in July to $30 billion as of September 4, signaling waning confidence among traders. Funding rates have also fallen, suggesting less demand for leveraged long positions as traders reduce risk ahead of economic data.
3. Ongoing technical issues About
Technically, Bitcoin is breaking out of a “rising wedge” pattern, which typically signals further declines. If the current trend continues, BTC could drop to around $54,000 in the near term. However, a bounce from the $56,300 support level could push the price towards $59,000, invalidating the bearish setup.
In short, Bitcoin’s recent price action reflects the overall market caution surrounding the US economic outlook and concerns about further Fed moves, making this a volatile time for cryptocurrency traders.
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