Bitcoin price struggles below $58k

Bitcoin (BTC) struggled to gain momentum overnight, falling below $58,000 before dipping further under $57,000. This decline coincided with a surge in put options, signaling that traders anticipate more short-term downside.

Recent underperforming economic data

Thursday morning saw the release of U.S. jobs data, revealing that August private payrolls increased by just 99,000, significantly missing expectations of 144,000. This marks the smallest gain since January 2021. All eyes are now on Friday's August jobs report, a key factor in shaping the Federal Reserve’s rate cut decision at the upcoming FOMC meeting on September 18.

According to the CME FedWatch Tool, recent underperforming economic data has raised the likelihood of a 50 basis points rate cut, with Wall Street estimating the probability at 41%.

Although investors have been calling for rate cuts since the start of 2024, many are cautious, as stock market pullbacks have historically followed such cuts. This caution has led to reduced market exposure, resulting in heightened volatility and erratic price movements.

"The Asian trading session remains challenging for cryptocurrencies," observed Alex Kuptsikevich, senior market analyst at FxPro. "Total market capitalization briefly recovered to $2.05 trillion on Wednesday evening but fell back to $2.0 trillion (+0.8% over 24 hours) as selling resumed Thursday morning."

Bitcoin has declined

Bitcoin has declined for nine of the last 11 days, with its attempt to stabilize above the 200-day moving average sparking further sell-offs. This pattern is continuing into Thursday as the price tests the lows seen over the past four months.

Bitcoin prices fell by up to 5% on Wednesday due to renewed concerns over a U.S. economic slowdown and anticipation of key data that could influence the Federal Reserve's interest rate decisions.

Data from the Institute for Supply Management (ISM) revealed that U.S. manufacturing remained subdued in August, signaling ongoing weakness in the sector.

"Rising financial markets and a weaker dollar did little to strengthen Bitcoin," Kuptsikevich remarked. "This could suggest that the weakness in cryptocurrencies reflects a broader reluctance to take on risk, potentially signaling that other markets might soon follow Bitcoin's lead."

'September curse' impacts financial markets

Despite the grim outlook for Bitcoin as the 'September curse' impacts financial markets, some analysts view this dip as the year's last good buying opportunity, predicting a climb to new highs before 2024 ends.

The market decline at the start of September is often called the 'last drop,' with expectations for prices to reach new highs by year-end, many analysts remain optimistic about Bitcoin’s prospects in Q4 2024. Standard Chartered recently raised its year-end BTC forecast from $100,000 to $150,000. They also predict Bitcoin could reach $250,000 in 2025, stabilizing around $200,000 by the third quarter of that year.

While the outlook for late 2024 remains positive, potential risks from "black swan events related to geopolitical conflicts, government actions, and U.S. elections, which could drastically alter market conditions. Some of these factors are already exerting downward pressure on Bitcoin’s growth. In a scenario free of black swan events, Bitcoin might break past the $100,000 mark by November, experience a correction, and then head toward the $200,000 range.

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