Bitcoin continues to fall as crypto-market sentiment shifts into ‘extreme fear’
Bitcoin fell to a one-month low on Friday, as the crypto market sentiment shifts to “extreme fear.”
The largest cryptocurrency by market capitalizationBTCUSD fell 3.9% to as low as $53,824, the lowest level since Aug. 5, according to Dow Jones Market Data. Bitcoin is roughly 27% lower from its record high at $73,798 reached in March.
U.S. stocks also traded lower on Friday, with the Dow Jones Industrial Average DJIA down 340 points, or 0.8% to 40,409. The S&P 500 SPX fell 1.4% and the Nasdaq Composite COMP traded 2.2% lower.
The sentiment in the crypto market is fairly negative, as the Fear & Greed index points to extreme fear , noted Peter Eberle, chief investment officer at Castle Funds. Investors who bought on the excitement of bitcoin halving are “giving up,” as bitcoin’s price have been mostly stuck in the range of $50,000 and $72,000 for the past five months.
Many investors were bullish on crypto earlier this year as bitcoin’s price historically appreciated months after each halving, which happens roughly every four years when the block rewards bitcoin miners get are cut in half. Halvings are a mechanism written in Bitcoin’s algorithm to control the supply of the crypto, which has a cap of 21 million tokens. However, for the past few months, bitcoin has failed to break out of the consolidation range.
Meanwhile, bitcoin is facing headwinds as traders start to price in an economic slowdown, said Greg Magadini, director of derivatives at Amberdata.
Investors are digesting the August jobs report released on Friday, which showed that the U.S. economy added 142,000 new jobs in August. Economists polled by the Wall Street Journal had forecast an increase of 161,000 new jobs in August. The unemployment rate dipped to 4.2% from 4.3% in July, declining for the first time in five months.
While the jobs data would support the Federal Reserve to cut its key policy interest rate in its September meeting, the data may still face downward revision, Magadini said.
