Bitcoin BTC
-4.07%
fell 4.5% over the past 24 hours to trade below $57,000 amid a selloff across U.S. stocks and the weak Asian stock market, analysts said.
Bitcoin is changing hands at around $56,696 at the time of writing, while ether traded down 6.4% at $2,366, according to The Block’s crypto price page. The overall crypto market was down 4.74% over the past day.
Peter Chung, head of research at Presto Research, said that the fall was mainly due to the weak August ISM data published overnight, which “led to sell-off across all TradFi risk assets.” The U.S. ISM manufacturing index for August came in at 47.2%, up 0.4 percentage points from July, but it remained in contraction territory.
Chung explained that bitcoin’s 4% fall over the past day occurred in two steps. “The first fall is actually quite moderate, compared to its 17% fall during the August 5 market meltdown which was due to the same growth scare. This suggests the BTC market was more efficient in discounting the growth risk than TradFi.”
“In my view, the second step is a knee-jerk reaction to the weak Asian stock market this morning by the Asia-based investors. TOPIX, KOSPI are all down quite a bit this morning,” Chung added. “But overall, the 4% fall is still moderate for BTC considering the magnitude of the fall in TradFi markets.”
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Japan’s TOPIX benchmark slid 2.7% during the morning session at the time of writing, while South Korea’s KOSPI fell 2.46% so far this morning. In the U.S., chipmaker Nvidia lost 9.5% on Tuesday.
“With the long weekend that took place [in the U.S.], most assets — traditional and crypto — are digesting bearish sentiment. Crypto, being more volatile and one of the few markets open 24/7, has felt the brunt of this,” Justin d'Anethan, head of APAC business development of crypto market maker Keyrock, told The Block.
Investors are also weighing the potential impact of the non-farm payroll data set to be released this Friday. “September will be a busy month with a mood-setting NFP this Friday and an almost guaranteed Fed rate cut in about two weeks. Investors will get a confirmation of the degree of the economic slowdown,” said Augustine Fan, head of insights at SOFA.org.
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