Bitcoin (BTC) fell below $54,000, its lowest since early August, after the release of the US jobs report for August. The report showed the US economy added 142,000 jobs, missing the expected 160,000. Revisions to June and July also saw 86,000 fewer jobs than initially reported, which fueled investor concerns over a potential recession. Despite a slight improvement in the unemployment rate to 4.2%, market fears persisted.
Impact on the market:
- Bitcoin: Dropped by 3.7%, now trading below $54,000, signalling continued bearish pressure.
- S&P 500: Fell by 1.5%, bringing weekly losses to 4%, driven by recession fears.
- Nasdaq 100: Declined 2.3%, leading to significant tech stock losses.
- WTI Futures: Slumped to its lowest price since June 2023, reflecting broader economic concerns.
- US 10-year yields: Dropped to 3.65%, a low not seen since mid-2023, signalling a flight to safety among investors.
Bitcoin’s Short-Term and Long-Term Outlook:
- Short-Term: Bitcoin remains under pressure with risks tilted to the downside, potentially testing the $50,000 level again in the coming weeks.
- Long-Term: If the US enters a recession and the government responds with rate cuts, quantitative easing (QE), and fiscal stimulus, Bitcoin could rally as a hedge against inflation and currency debasement. Some analysts project a price surge to over $100,000 in the next few years.
Political Influence on Bitcoin:
- Trump vs. Harris: A Trump victory, perceived as more crypto-friendly, could boost Bitcoin’s price, but uncertainty remains high until the 2024 US Presidential election is settled.
