Bitcoin drops below $54K as weak US jobs report rattles markets

Bitcoin (CRYPTO:BTC) fell under the $54,000 mark on September 6, 2024, after briefly reaching $57,000 earlier in the day.  

The dip followed the release of the U.S. nonfarm payrolls report, which revealed that only 142,000 jobs were added in August, falling short of expectations.  

This weaker-than-expected jobs data created turbulence in the crypto market, causing significant price swings and sparking concerns among investors.  

After touching a low of $53,780, Bitcoin was trading around $54,101, down roughly 4% over the past 24 hours.  

The disappointing jobs figures led to speculation that the Federal Reserve might cut interest rates, with estimates showing a 70% chance of a 25 basis-point reduction at the upcoming Federal Open Market Committee (FOMC) meeting on September 18.  

Such potential moves by the Fed could further influence market dynamics.  

The downturn was not limited to Bitcoin.  

Major altcoins also faced losses, with Ether (ETH) down 4.6%, trading at $2,261.  

Ripple’s XRP and Dogecoin (DOGE) both saw declines of more than 4% as the market reacted to the economic data.  

These declines reflect the broader unease in the crypto market amid uncertainties about economic policy and potential interest rate changes.  

The volatile market conditions resulted in significant liquidations.  

Reports indicated that around $93 million were liquidated within a four-hour period, mainly involving leveraged long positions.  

These liquidations caught traders off guard, especially those who had expected a further rally in crypto prices.  

The weak job numbers have fueled debate over possible actions by the Federal Reserve.  

Many investors are now betting on a 25-basis point rate cut at the next FOMC meeting.  

According to Sean Farrell, head of digital asset research at Fundstrat, a smaller cut would be more favorable for risk assets, while a larger 50-basis point cut could signal greater concern about a potential recession in the U.S. economy.  

“All things being equal, I still view 25 bps as better for asset prices than 50 bps,” Farrell said, indicating that market participants are watching closely for the Fed's next steps.  

Despite the sharp declines, data shows that bearish pressure on Bitcoin remains relatively low.  

This suggests that the current downward trend may not be driven by aggressive selling, and the market may still find support if economic data and Federal Reserve commentary favor more accommodative monetary policy.  

Analysts believe that while the market is under pressure, the extent of the bearish sentiment may not be as severe as it appears.  

The overall crypto market, including altcoins, has seen declines across the board, with many falling below key resistance levels.  

However, some market watchers suggest that the recent pullback might be a temporary reaction to the economic data rather than a sign of deeper bearish trends.  

As investors wait for clearer signals from the Federal Reserve, the crypto market's direction in the near term remains uncertain.  

At the time of reporting, the Bitcoin (BTC) price was $54,219.69.