U.Today – the largest cryptocurrency by market value, plunged to a low of $55,555 in early trading on Wednesday, extending losses from Tuesday.
Signs of economic weakness in the United States and China are unsettling investors, compounding the worst period for global markets since the Aug. 5 crash. The pessimism has spilled over into cryptocurrencies, with traders awaiting Friday's U.S. jobs report to see if a deeper slowdown is looming.
Amid a broader retreat from riskier investments in global markets due to fears over the economic outlook, Bitcoin fell to a one-month low while other major cryptocurrencies suffered losses.
At the time of writing, several cryptocurrencies were trading in the red. (SHIB) and (ADA) suffered losses of 2.79%, 2.64%, and 1.79%, respectively.
Bitcoin was suffering further losses, falling 3.86% over the past 24 hours to $56,671 at the time of writing.
Cryptocurrency Market Outlook
In a recent research note, Fairlead Strategies LLC technical analyst Katie Stockton expressed a “long-term neutral bias” toward Bitcoin.
Total open interest (or outstanding contracts) in futures has fallen to its lowest level since May, indicating concern in the market. Meanwhile, U.S. bitcoin exchange-traded funds have seen the longest period of net outflows since June, according to Bloomberg statistics.
If history is any guide, the short-term outlook remains challenging. September is traditionally considered a gloomy month for cryptocurrencies. Based on historical statistics, Bitcoin has had an average September value loss of 8% over the past five years, through 2023.
The Federal Reserve's next meeting is scheduled for later this month, when it will deliver its latest rate decision. Markets are broadly pricing in a rate cut by the central bank, but traders are divided on the significance of such a cut.
This article was originally published on U.Today
